G.R. No.

212426
RENE A.V. SAGUISAG, WIGBERTO E. TAADA, FRANCISCO "DODONG" NEMENZO,
JR., SR. MARY JOHN MANANZAN, PACIFICO A. AGABIN, ESTEBAN "STEVE"
SALONGA, H. HARRY L. ROQUE, JR., EVALYN G. URSUA, EDRE U. OLALIA, DR.
CAROL PAGADUAN-ARAULLO, DR. ROLAND SIMBULAN, AND TEDDY
CASIO, Petitioners,
vs.
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR., DEPARTMENT OF NATIONAL
DEFENSE SECRETARY VOLTAIRE GAZMIN, DEPARTMENT OF FOREIGN AFFAIRS
SECRETARY ALBERT DEL ROSARIO, JR., DEPARTMENT OF BUDGET AND
MANAGEMENT SECRETARY FLORENCIO ABAD, AND ARMED FORCES OF THE
PHILIPPINES CHIEF OF STAFF GENERAL EMMANUEL T. BAUTISTA, Respondents.

SERENO, J.:

The petitions1 before this Court question the constitutionality of the Enhanced Defense Cooperation
Agreement (EDCA) between the Republic of the Philippines and the United States of America (U.S.).
Petitioners claimed that the instrument violated multiple constitutional provisions. Respondents argue
that petitioners lack standing to bring the suit.

I. BROAD CONSTITUTIONAL CONTEXT OF THE POWERS OF THE PRESIDENT:

DEFENSE, FOREIGN RELATIONS AND EDCA

A. The Prime Duty of the State and the Consolidation of Executive Power in the President
Mataimtim kong pinanunumpaan (o pinatotohanan) na tutuparin ko nang buong katapatan at sigasig
ang aking mga tungkulin bilang Pangulo (o Pangalawang Pangulo o Nanunungkulang Pangulo) ng
Pilipinas, pangangalagaan at ipagtatanggol ang kanyang Konstitusyon, ipatutupad ang mga batas nito,
magiging makatarungan sa bawat tao, at itatalaga ang aking sarili sa paglilingkod sa Bansa. Kasihan
nawa aka ng Diyos.
- Panunumpa sa Katungkulan ng Pangulo ng Pilipinas ayon sa Saligang Batas

B. The duty to protect the territory and the citizens of the Philippines, the power to call upon the
people to defend the State, and the President as Commander-in-Chief

C. The power and duty to conduct foreign relations

In specific provisions, the President's power is also limited, or at least shared, as in:
1. Section 2 of Article II on the conduct of war;
2. Sections 20 and 21 of Article VII on foreign loans, treaties, and international agreements;
3. Sections 4(2) and 5(2)(a) of Article VIII on the judicial review of executive acts;
4. Sections 4 and 25 of Article XVIII on treaties and international agreements entered into prior to the
Constitution and on the presence of foreign military troops, bases, or facilities.

D. The relationship between the two major presidential functions and the role of the Senate
As previously mentioned, the Senate has a role in ensuring that treaties or international agreements the
President enters into, as contemplated in Section 21 of Article VII of the Constitution, obtain the
approval of two-thirds of its members.

Previously, treaties under the 1973 Constitution required ratification by a majority of the Batasang
Pambansa, except in instances wherein the President "may enter into international treaties or agreements
as the national welfare and interest may require." This left a large margin of discretion that the President
could use to bypass the Legislature altogether. This was a departure from the 1935 Constitution, which
explicitly gave the President the power to enter into treaties only with the concurrence of two-thirds of
all the Members of the Senate. The 1987 Constitution returned the Senate's power and, with it, the
legislative's traditional role in foreign affairs.

The responsibility of the President when it comes to treaties and international agreements under the
present Constitution is therefore shared with the Senate. This shared role, petitioners claim, is bypassed
by EDCA.
II. HISTORICAL ANTECEDENTS OF EDCA

A. U.S. takeover of Spanish colonization and its military bases, and the transition to Philippine independence
1898- Battle of Manila Bay during the Spanish American War. Spain relinquished its sovereignty over
the Philippine Islands in favor of the U.S. upon its formal surrender a few months later.
1899, the Americans had created a military administration in the archipelago.
When it became clear that the American forces intended to impose colonial control over the Philippine
Islands, General Emilio Aguinaldo immediately led the Filipinos into an all-out war against the U.S. The
Filipinos were ultimately defeated in the Philippine-American War.
1902 was the downfall of the first Philippine Republic.
The Americans took over.
They took over and expanded the former Spanish Naval Base in Subic Bay, Zambales, and put up a
cavalry post called Fort Stotsenberg in Pampanga, now known as Clark Air Base.
Talks of eventual Philippine Independence proceeded. The U.S. manifested the desire to maintain
military bases and armed forces in the country.
The U.S. Congress later enacted the Hare-Hawes-Cutting Act of 1933, which required that the proposed
constitution of an independent Philippines recognize the right of the U.S. to maintain the latter's armed
forces and military bases. The Philippine Legislature rejected that law, as it also gave the U.S. the power
to unilaterally designate any part of Philippine territory as a permanent military or naval base of the U.S.
within two years from complete independence.
The U.S. Legislature subsequently crafted another law called the Tydings-McDuffie Act or the
Philippine Independence Act of 1934. The new law provided for the surrender to the Commonwealth
Government of "all military and other reservations" of the U.S. government in the Philippines, except
"naval reservations and refueling stations." Furthermore, the law authorized the U.S. President to enter
into negotiations for the adjustment and settlement of all questions relating to naval reservations and
fueling stations within two years after the Philippines would have gained independence.
Under the Tydings-McDuffie Act, the U.S. President would proclaim the American withdrawal and
surrender of sovereignty over the islands 10 years after the inauguration of the new government in the
Philippines.
This law eventually led to the promulgation of the 1935 Philippine Constitution.

At the height of the Second World War, the Philippine and the U.S. Legislatures each passed resolutions
authorizing their respective Presidents to negotiate the matter of retaining military bases in the country
after the planned withdrawal of the U.S.
1946, the countries entered into the Treaty of General Relations, in which the U.S. relinquished all
control and sovereignty over the Philippine Islands, except the areas that would be covered by the
American military bases in the country.
This treaty eventually led to the creation of the post-colonial legal regime on which would hinge the
continued presence of U.S. military forces until 1991: the Military Bases Agreement (MBA) of 1947,
the Military Assistance Agreement of 1947, and the Mutual Defense Treaty (MDT) of 1951.

B. Former legal regime on the presence of U.S. armed forces in the territory of an independent Philippines
(1946-1991)

The Military Bases Agreement (MBA)

Soon after the Philippines was granted independence, the two countries entered into their first military
arrangement pursuant to the Treaty of General Relations - the 1947 Military Bases Agreement. The
Senate concurred on the premise of "mutuality of security interest," which provided for the presence and
operation of 23 U.S. military bases in the Philippines for 99 years or until the year 2046. The treaty also
obliged the Philippines to negotiate with the U.S. to allow the latter to expand the existing bases or to
acquire new ones as military necessity might require.
A number of significant amendments to the 1947 MBA were made.
Ramos-Rusk Agreement of 1966, which reduced the term of the treaty from 99 years to a
total of 44 years or until 1991.
Bohlen-Serrano Memorandum of Agreement provided for the return to the Philippines of
17 U.S. military bases covering a total area of 117,075 hectares. Twelve years later, the
U.S. returned Sangley Point in Cavite City through an exchange of notes.
Romulo-Murphy Exchange of Notes of 1979, the parties agreed to the recognition of
Philippine sovereignty over Clark and Subic Bases and the reduction of the areas that
 could be used by the U.S. military. The agreement also provided for the mandatory review
of the treaty every five years.
1983- Romualdez-Armacost Agreement, revised the MBA. The revision pertained to the operational use
of the military bases by the U.S. government within the context of Philippine sovereignty, including the
need for prior consultation with the Philippine government on the former' s use of the bases for military
combat operations or the establishment of long-range missiles.

The Military Assistance Agreement (MAA)

Pursuant to the legislative authorization granted under Republic Act No. 9, the President also entered
into the 1947 Military Assistance Agreement with the U.S. This executive agreement established the
conditions under which U.S. military assistance would be granted to the Philippines, particularly the
provision of military arms, ammunitions, supplies, equipment, vessels, services, and training for the
latter's defense forces.
An exchange of notes in 1953 made it clear that the agreement would remain in force until terminated
by any of the parties.

The Military Defense Treaty (MDT)

To further strengthen their defense and security relationship, the Philippines and the U.S. next entered into
the Military Defense Treaty in 1951. Concurred in by both the Philippine and the U.S. Senates, the treaty
has two main features:
first, it allowed for mutual assistance in maintaining and developing their individual and
collective capacities to resist an armed attack; and
second, it provided for their mutual self-defense in the event of an armed attack against the
territory of either party. The treaty was premised on their recognition that an armed attack
on either of them would equally be a threat to the security of the other.

C. Current legal regime on the presence of U.S. armed forces in the country
The MBA expired in 1991.
Treaty of Friendship, Cooperation and Security - the countries sought to recast their military ties by
providing a new framework for their defense cooperation and the use of Philippine installations. One of
the proposed provisions included an arrangement in which U.S. forces would be granted the use of
certain installations within the Philippine naval base in Subic. On 16 September 1991, the Senate
rejected the proposed treaty.
The consequent expiration of the 1947 MBA led to the suspension in 1995 of large-scale joint military
exercises.
In the meantime, the respective governments of the two countries agreed to hold joint exercises at a
substantially reduced level. The military arrangements between them were revived in 1999 when they
concluded the first Visiting Forces Agreement (VFA).

The Visiting Forces Agreement (VFA)

As a "reaffirmation of the obligations under the MDT," the VFA has laid down the regulatory
mechanism for the treatment of U.S. military and civilian personnel visiting the country. It contains
provisions on the entry and departure of U.S. personnel; the purpose, extent, and limitations of their
activities; criminal and disciplinary jurisdiction; the waiver of certain claims; the importation and
exportation of equipment, materials, supplies, and other pieces of property owned by the U.S.
government; and the movement of U.S. military vehicles, vessels, and aircraft into and within the
country.
The Philippines and the U.S. also entered into a second counterpart agreement (VFA II), which in turn
regulated the treatment of Philippine military and civilian personnel visiting the U.S. The Philippine
Senate concurred in the first VFA on 27 May 1999.
Beginning in January 2002, U.S. military and civilian personnel started arriving in Mindanao to take
part in joint military exercises with their Filipino counterparts. Called Balikatan, these exercises
involved trainings aimed at simulating joint military maneuvers pursuant to the MDT.
In the same year, the Philippines and the U.S. entered into the Mutual Logistics Support Agreement to
"further the interoperability, readiness, and effectiveness of their respective military forces"in
accordance with the MDT, the Military Assistance Agreement of 1953, and the VFA.
The new agreement outlined the basic terms, conditions, and procedures for facilitating the reciprocal
provision of logistics support, supplies, and services between the military forces of the two
countries. The phrase "logistics support and services" includes billeting, operations support, construction
 and use of temporary structures, and storage services during an approved activity under the existing
military arrangements. Already extended twice, the agreement will last until 2017.

FACTS

D. The Enhanced Defense Cooperation Agreement

EDCA authorizes the U.S. military forces to have access to and conduct activities within
certain "Agreed Locations" in the country.
It was not transmitted to the Senate on the executive's understanding that to do so was no
longer necessary.
Accordingly, in June 2014, the (DFA) and the U.S. Embassy exchanged diplomatic notes
confirming the completion of all necessary internal requirements for the agreement to
enter into force in the two countries.
According to the Philippine government, the conclusion of EDCA was the result of intensive
and comprehensive negotiations in the course of almost two years. After eight rounds of
negotiations, the Secretary of National Defense and the U.S. Ambassador to the
Philippines signed the agreement on 28 April 2014.
President Benigno S. Aquino III ratified EDCA on 6 June 2014.
The OSG clarified during the oral arguments that the Philippine and the U.S. governments had
yet to agree formally on the specific sites of the Agreed Locations mentioned in the agreement.
Two petitions for certiorari were thereafter filed before us assailing the constitutionality
of EDCA. They primarily argue that it should have been in the form of a treaty
concurred in by the Senate, not an executive agreement.
The Senators adopted Senate Resolution No. (SR) 105. The resolution expresses the
"strong sense" of the Senators that for EDCA to become valid and effective, it must first
be transmitted to the Senate for deliberation and concurrence.

III. ISSUES

A. Whether the President may enter into an executive agreement on foreign military bases, troops,
or facilities
B. Whether the provisions under EDCA are consistent with the Constitution, as well as with
existing laws and treaties

IV. DISCUSSION

The role of the President as the executor of the law includes the duty to defend the State, for which purpose
he may use that power in the conduct of foreign relations

The President shall have control of all the executive departments, bureaus, and offices. He shall ensure that the laws be
faithfully executed.

The duty to faithfully execute the laws of the land is inherent in executive power and is intimately related to the other
executive functions. These functions include the faithful execution of the law in autonomous regions; the right to prosecute
crimes; the implementation of transportation projects; the duty to ensure compliance with treaties, executive agreements and
executive orders; the authority to deport undesirable aliens; the conferment of national awards under the President's
jurisdiction; and the overall administration and control of the executive department.

This mandate is self-executory by virtue of its being inherently executive in nature. As Justice Antonio T. Carpio previously
wrote:
[i]f the rules are issued by the President in implementation or execution of self-executory constitutional powers
vested in the President, the rule-making power of the President is not a delegated legislative power. The most
important self-executory constitutional power of the President is the President's constitutional duty and mandate to
"ensure that the laws be faithfully executed." The rule is that the President can execute the law without any
delegation of power from the legislature.
In light of this constitutional duty, it is the President's prerogative to do whatever is legal and necessary for Philippine defense
interests. It is no coincidence that the constitutional provision on the faithful execution clause was followed by that on the
President's commander-in-chief powers, which are specifically granted during extraordinary events of lawless violence,
invasion, or rebellion. And this duty of defending the country is unceasing, even in times when there is no state of lawlesss
violence, invasion, or rebellion. At such times, the President has full powers to ensure the faithful execution of the laws.

***On the Dissent

It would therefore be remiss for the President and repugnant to the faithful-execution clause of the Constitution to do
nothing when the call of the moment requires increasing the military's defensive capabilities, which could include
forging alliances with states that hold a common interest with the Philippines or bringing an international suit against
an offending state.

The context drawn in the analysis above has been termed by Justice Arturo D. Brion's Dissenting Opinion as the
beginning of a "patent misconception." His dissent argues that this approach taken in analyzing the President's role as
executor of the laws is preceded by the duty to preserve and defend the Constitution, which was allegedly overlooked.

In arguing against the approach, however, the dissent grossly failed to appreciate the nuances of the analysis, if read
holistically and in context. The concept that the President cannot function with crippled hands and therefore can
disregard the need for Senate concurrence in treaties was never expressed or implied. Rather, the appropriate reading of
the preceding analysis shows that the point being elucidated is the reality that the President's duty to execute the laws
and protect the Philippines is inextricably interwoven with his foreign affairs powers, such that he must resolve issues
imbued with both concerns to the full extent of his powers, subject only to the limits supplied by law. In other words,
apart from an expressly mandated limit, or an implied limit by virtue of incompatibility, the manner of execution by the
President must be given utmost deference. This approach is not different from that taken by the Court in situations with
fairly similar contexts.

Thus, the analysis portrayed by the dissent does not give the President authority to bypass constitutional safeguards and
limits. In fact, it specifies what these limitations are, how these limitations are triggered, how these limitations function,
and what can be done within the sphere of constitutional duties and limitations of the President.

Justice Brion's dissent likewise misinterprets the analysis proffered when it claims that the foreign relations power of
the President should not be interpreted in isolation. The analysis itself demonstrates how the foreign affairs function,
while mostly the President's, is shared in several instances, namely in Section 2 of Article II on the conduct of war;
Sections 20 and 21 of Article VII on foreign loans, treaties, and international agreements; Sections 4(2) and 5(2)(a) of
Article VIII on the judicial review of executive acts; Sections 4 and 25 of Article XVIII on treaties and international
agreements entered into prior to the Constitution and on the presence of foreign military troops, bases, or facilities.

In fact, the analysis devotes a whole subheading to the relationship between the two major presidential functions and
the role of the Senate in it.

This approach of giving utmost deference to presidential initiatives in respect of foreign affairs is not novel to the
Court. The President's act of treating EDCA as an executive agreement is not the principal power being analyzed as the
Dissenting Opinion seems to suggest. Rather, the preliminary analysis is in reference to the expansive power of foreign
affairs. We have long treated this power as something the Courts must not unduly restrict. As we stated recently
in Vinuya v. Romulo:
To be sure, not all cases implicating foreign relations present political questions, and courts certainly possess
the authority to construe or invalidate treaties and executive agreements. However, the question whether the
Philippine government should espouse claims of its nationals against a foreign government is a foreign
relations matter, the authority for which is demonstrably committed by our Constitution not to the courts but
to the political branches. In this case, the Executive Department has already decided that it is to the best
interest of the country to waive all claims of its nationals for reparations against Japan in the Treaty of Peace
of 1951. The wisdom of such decision is not for the courts to question. Neither could petitioners herein assail
the said determination by the Executive Department via the instant petition for certiorari.

In Bavan v. Executive Secretary and Pimentel v. Executive Secretary; its overreaching principle was, perhaps, best
articulated in (now Chief) Justice Puno's dissent in Secretary of Justice v. Lantion:
The conduct of foreign relations is full of complexities and consequences, sometimes with life and death
significance to the nation especially in times of war. It can only be entrusted to that department of government
which can act on the basis of the best available information and can decide with decisiveness. It is also the
President who possesses the most comprehensive and the most confidential information about foreign
countries for our diplomatic and consular officials regularly brief him on meaningful events all over the
world. He has also unlimited access to ultra-sensitive military intelligence data. In fine, the presidential role in
foreign affairs is dominant and the President is traditionally accorded a wider degree of discretion in the
 conduct of foreign affairs. The regularity, nay, validity of his actions are adjudged under less stringent
standards, lest their judicial repudiation lead to breach of an international obligation, rupture of state relations,
forfeiture of confidence, national embarrassment and a plethora of other problems with equally undesirable
consequences. (Emphases supplied)

Understandably, this Court must view the instant case with the same perspective and understanding, knowing full well
the constitutional and legal repercussions of any judicial overreach.
The plain meaning of the Constitution prohibits the entry of foreign military bases, troops or
facilities, except by way of a treaty concurred in by the Senate - a clear limitation on the
President's dual role as defender of the State and as sole authority in foreign relations.

Despite the President's roles as defender of the State and sole authority in foreign relations, the 1987
Constitution expressly limits his ability in instances when it involves the entry of foreign military
bases, troops or facilities. The initial limitation is found in Section 21 of the provisions on the
Executive Department: "No treaty or international agreement shall be valid and effective unless
concurred in by at least two-thirds of all the Members of the Senate." The specific limitation is
given by Section 25 of the Transitory Provisions, the full text of which reads as follows:

SECTION 25. After the expiration in 1991 of the Agreement between the Republic of the
Philippines and the United States of America concerning Military Bases, foreign military
bases, troops, or facilities shall not be allowed in the Philippines except under a treaty duly
concurred in by the Senate and, when the Congress so requires, ratified by a majority of the
votes cast by the people in a national referendum held for that purpose, and recognized as a
treaty by the other contracting State.

The President, however, may enter into an executive agreement on foreign military bases, troops,
or facilities, if (a) it is not the instrument that allows the presence of foreign military bases,
troops, or facilities; or (b) it merely aims to implement an existing law or treaty.

In view of Section 25, petitioners argue that EDCA must be in the form of a "treaty" duly
concurred in by the Senate. They stress that the Constitution is unambigous in mandating the
transmission to the Senate of all international agreements concluded after the expiration of the MBA in
1991 - agreements that concern the presence of foreign military bases, troops, or facilities in the
country. Accordingly, petitioners maintain that the Executive Department is not given the choice
to conclude agreements like EDCA in the form of an executive agreement.

This is also the view of the Senate, which, through a majority vote of 15 of its members - with 1
against and 2 abstaining - says in SR 105 that EDCA must be submitted to the Senate in the form of a
treaty for concurrence by at least two-thirds of all its members.

The Senate cites two constitutional provisions (Article VI, Section 21 and Article XVIII, Section 25) to
support its position. Compared with the lone constitutional provision that the Office of the Solicitor
General (OSG) cites, which is Article XVIII, Section 4(2), which includes the constitutionality of
"executive agreement(s)" among the cases subject to the Supreme Court's power of judicial review, the
Constitution clearly requires submission of EDCA to the Senate. Two specific provisions versus one
general provision means that the specific provisions prevail.

***On Senator Santiagos Arguments

The author of SR 105, Senator Miriam Defensor Santiago, upon interpellation even added that the MDT, which the
Executive claims to be partly implemented through EDCA, is already obsolete. There are two insurmountable
obstacles to this Court's agreement with SR 105, as well as with the comment on interpellation made by Senator
Santiago.

First, the concept of "executive agreement" is so well-entrenched in this Court's pronouncements on the powers of
the President. When the Court validated the concept of "executive agreement," it did so with full knowledge of the
Senate's role in concurring in treaties. It was aware of the problematique of distinguishing when an international
agreement needed Senate concurrence for validity, and when it did not; and the Court continued to validate the
 existence of "executive agreements" even after the 1987 Constitution. This follows a long line of similar decisions
upholding the power of the President to enter into an executive agreement.

Second, the MDT has not been rendered obsolescent, considering that as late as 2009, this Court continued to
recognize its validity.

Third, to this Court, a plain textual reading of Article XIII, Section 25, inevitably leads to the conclusion that it
applies only to a proposed agreement between our government and a foreign government, whereby military bases,
troops, or facilities of such foreign government would be "allowed" or would "gain entry" Philippine territory.

Note that the provision "shall not be allowed" is a negative injunction. This wording signifies that the
President is not authorized by law to allow foreign military bases, troops, or facilities to enter the
Philippines, except under a treaty concurred in by the Senate. Hence, the constitutionally
restricted authority pertains to the entry of the bases, troops, or facilities, and not to the activities
to be done after entry.

Under the principles of constitutional construction, of paramount consideration is the plain meaning of
the language expressed in the Constitution, or the verba legis rule. It is only in those instances in which
the constitutional provision is unclear, ambiguous, or silent that further construction must be done to
elicit its meaning.

It is evident that the constitutional restriction refers solely to the initial entry of the foreign
military bases, troops, or facilities. Once entry is authorized, the subsequent acts are thereafter
subject only to the limitations provided by the rest of the Constitution and Philippine law, and
not to the Section 25 requirement of validity through a treaty.

The VFA has already allowed the entry of troops in the Philippines.

The OSG emphasizes that EDCA can be in the form of an executive agreement, since it merely involves
"adjustments in detail" in the implementation of the MDT and the VFA. It points out that there are
existing treaties between the Philippines and the U.S. that have already been concurred in by the
Philippine Senate and have thereby met the requirements of the Constitution under Section 25.
Because of the status of these prior agreements, respondent emphasizes that EDCA need not be
transmitted to the Senate.

The President may generally enter into executive agreements subject to limitations defined by the
Constitution and may be in furtherance of a treaty already concurred in by the Senate.

We discuss in this section why the President can enter into executive agreements.

This Court affirms the continued existence of that class of international agreements called "executive
agreements" as it was intended by the framers of the Constitution.

The power of the President to enter into binding executive agreements without Senate
concurrence is already well-established in this jurisdiction. That power has been alluded to in our
present and past Constitutions, in various statutes, in Supreme Court decisions, and during the
deliberations of the Constitutional Commission. They cover a wide array of subjects with varying
scopes and purposes, including those that involve the presence of foreign military forces in the
country.

As previously discussed, this constitutional mandate emanates from the inherent power of the President
to enter into agreements with other states, including the prerogative to conclude binding executive
agreements that do not require further Senate concurrence. The existence of this presidential power is
so well-entrenched that Section 5(2)(a), Article VIII of the Constitution, even provides for a check on
its exercise. As expressed below, executive agreements are among those official governmental acts that
can be the subject of this Court's power of judicial review:
 (2) Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the Rules of
Court may provide, final judgments and orders of lower courts in:
(a) All cases in which the constitutionality or
validity of any treaty, international or executive agreement, law, presidential decree,
proclamation, order, instruction, ordinance, or regulation is in question.
(Emphases supplied)

***What are Executive Agreements?

In Commissioner of Customs v. Eastern Sea Trading, executive agreements are defined as

"international agreements embodying adjustments of detail carrying out well-established
national policies and traditions and those involving arrangements of a more or less temporary
nature."

In Bayan Muna v. Romulo, this Court further clarified that executive agreements can cover a wide array
of subjects that have various scopes and purposes.

One of the distinguishing features of executive agreements is that their validity and effectivity are
not affected by a lack of Senate concurrence. This distinctive feature was recognized as early as
in Eastern Sea Trading (1961), viz:
Treaties are formal documents which require ratification with the approval of two-thirds of the
Senate. Executive agreements become binding through executive action without the need of a
vote by the Senate or by Congress.

The right of the Executive to enter into binding agreements without the necessity of subsequent
Congressional approval has been confirmed by long usage. From the earliest days of our
history we have entered into executive agreements covering such subjects as commercial and
consular relations, most-favored-nation rights, patent rights, trademark and copyright
protection, postal and navigation arrangements and the settlement of claims. The validity of
these has never been seriously questioned by our courts. (Emphases Supplied)

Executive agreements may dispense with the requirement of Senate concurrence because
executive agreements merely involve arrangements on the implementation of existing policies,
rules, laws, or agreements. The raison d'etre of executive agreements hinges
on prior constitutional or legislative authorizations. They are concluded:
1. to adjust the details of a treaty;
2. pursuant to or upon confirmation by an act of the Legislature; or
3. in the exercise of the President's independent powers under the Constitution.

International practice has accepted the use of various forms and designations of international
agreements, ranging from the traditional notion of a treaty - which connotes a formal, solemn
instrument - to engagements concluded in modem, simplified forms that no longer necessitate
ratification. An international agreement may take different forms: treaty, act, protocol,
agreement, concordat, compromis d'arbitrage, convention, covenant, declaration, exchange of notes,
statute, pact, charter, agreed minute, memorandum of agreement, modus vivendi, or some other form.
***International Agreements, Treaties and Executive Agreements

Consequently, under international law, the distinction between a treaty and an international
agreement or even an executive agreement is irrelevant for purposes of determining international
rights and obligations.

There remain two very important features that distinguish treaties from executive agreements and
translate them into terms of art in the domestic setting.

First, executive agreements must remain traceable to an express or implied authorization under the
Constitution, statutes, or treaties. The absence of these precedents puts the validity and effectivity of
executive agreements under serious question for the main function of the Executive is to enforce the
Constitution and the laws enacted by the Legislature, not to defeat or interfere in the performance of
these rules. In turn, executive agreements cannot create new international obligations that are not
expressly allowed or reasonably implied in the law they purport to implement.

Second, treaties are, by their very nature, considered superior to executive agreements. Treaties are
products of the acts of the Executive and the Senate unlike executive agreements, which are solely
executive actions. Because of legislative participation through the Senate, a treaty is regarded as being
on the same level as a statute. If there is an irreconcilable conflict, a later law or treaty takes
precedence over one that is prior. An executive agreement is treated differently. Executive agreements
that are inconsistent with either a law or a treaty are considered ineffective. Both types of
international agreement are nevertheless subject to the supremacy of the Constitution.

Although the Chief Executive wields the exclusive authority to conduct our foreign relations, this
power must still be exercised within the context and the parameters set by the Constitution, as well as
by existing domestic and international laws. There are constitutional provisions that restrict or limit the
President's prerogative in concluding international agreements, such as those that involve the
following:
a. The policy of freedom from nuclear weapons within Philippine territory
b. The fixing of tariff rates, import and export quotas, tonnage and wharfage dues, and other duties or
imposts, which must be pursuant to the authority granted by Congress
c. The grant of any tax exemption, which must be pursuant to a law concurred in by a majority of all the
Members of Congress
d. The contracting or guaranteeing, on behalf of the Philippines, of foreign loans that must be previously
concurred in by the Monetary Board
e. The authorization of the presence of foreign military bases, troops, or facilities in the country must be in
the form of a treaty duly concurred in by the Senate.
f. For agreements that do not fall under paragraph 5, the concurrence of the Senate is required, should the
form of the government chosen be a treaty.

NOTES:
Treaties are formal contracts between the Philippines and other States-parties, which are in the
nature of international agreements, and also of municipal laws in the sense of their binding
nature.
International agreements are similar instruments, the provisions of which may require the
ratification of a designated number of parties thereto. These agreements involving political
issues or changes in national policy, as well as those involving international agreements of a
 permanent character, usually take the form of treaties. They may also include commercial
agreements, which are executive agreements essentially, but which proceed from previous
authorization by Congress, thus dispensing with the requirement of concurrence by the Senate.
Executive agreements are generally intended to implement a treaty already enforced or to
determine the details of the implementation thereof that do not affect the sovereignty of the
State.

The President had the choice to enter into EDCA by way of an executive agreement or a treaty.

No court can tell the President to desist from choosing an executive agreement over a treaty to embody
an international agreement, unless the case falls squarely within Article VIII, Section 25.

As can be gleaned from the debates among the members of the Constitutional Commission, they were
aware that legally binding international agreements were being entered into by countries in forms other
than a treaty. At the same time, it is clear that they were also keen to preserve the concept of "executive
agreements" and the right of the President to enter into such agreements.

What we can glean from the discussions of the Constitutional Commissioners is that they understood
the following realities:
1. Treaties, international agreements, and executive agreements are all constitutional
manifestations of the conduct of foreign affairs with their distinct legal characteristics.
2. Treaties and international agreements that cannot be mere executive agreements must, by
constitutional decree, be concurred in by at least two-thirds of the Senate.
3. However, an agreement - the subject of which is the entry of foreign military troops, bases, or
facilities - is particularly restricted. The requirements are that it be in the form of a treaty
concurred in by the Senate; that when Congress so requires, it be ratified by a majority of the
votes cast by the people in a national referendum held for that purpose; and that it be
recognized as a treaty by the other contracting State.
4. Thus, executive agreements can continue to exist as a species of international agreements.

Bayan vs. Executive Secretary

There are no hard and fast rules on the propriety of entering, on a given subject, into a treaty or
an executive agreement as an instrument of international relations. The primary consideration
in the choice of the form of agreement is the parties' intent and desire to craft an international
agreement in the form they so wish to further their respective interests. Verily, the matter of
form takes a back seat when it comes to effectiveness and binding effect of the enforcement of
a treaty or an executive agreement, as the parties in either international agreement each labor
under the pacta sunt servanda principle.

Indeed, in the field of external affairs, the President must be given a larger measure of authority and
wider discretion, subject only to the least amount of checks and restrictions under the Constitution.
The rationale behind this power and discretion was recognized by the Court in Vinuya v. Executive
Secretary, cited earlier.
Accordingly, in the exercise of its power of judicial review, the Court does not look into whether an
international agreement should be in the form of a treaty or an executive agreement, save in cases
in which the Constitution or a statute requires otherwise. Rather, in view of the vast constitutional
powers and prerogatives granted to the President in the field of foreign affairs, the task of the
Court is to determine whether the international agreement is consistent with the applicable
limitations.

Executive agreements may cover the matter of foreign military forces if it merely involves detail
adjustments.

However, the executive agreement must not go beyond the parameters, limitations, and standards set
by the law and/or treaty that the former purports to implement; and must not unduly expand the
international obligation expressly mentioned or necessarily implied in the law or treaty.
The executive agreement must be consistent with the Constitution, as well as with existing laws and
treaties.

In light of the President's choice to enter into EDCA in the form of an executive agreement,
respondents carry the burden of proving that it is a mere implementation of existing laws and treaties
concurred in by the Senate. EDCA must thus be carefully dissected to ascertain if it remains within the
legal parameters of a valid executive agreement.
EDCA is consistent with the content, purpose, and framework of the MDT and the VFA

The starting point of our analysis is the rule that "an executive agreement may not be used to amend a
treaty."

Justice Marvic M.V.F. Leonen's Dissenting Opinion posits that EDCA "substantially modifies or
amends the VFA" and follows with an enumeration of the differences between EDCA and the VFA.

The first difference emphasized is that EDCA does not only regulate visits as the VFA does, but allows
temporary stationing on a rotational basis of U.S. military personnel and their contractors in physical
locations with permanent facilities and pre-positioned military materiel.
Rebuttal: This argument does not take into account that these permanent facilities, while built
by U.S. forces, are to be owned by the Philippines once constructed. Even the VFA allowed
construction for the benefit of U.S. forces during their temporary visits.

The second difference stated by the dissent is that EDCA allows the prepositioning of military
materiel, which can include various types of warships, fighter planes, bombers, and vessels, as well as
land and amphibious vehicles and their corresponding ammunition.
Rebuttal: However, the VFA clearly allows the same kind of equipment, vehicles, vessels, and
aircraft to be brought into the country. The VFA contemplates that U.S. equipment, materials,
supplies, and other property are imported into or acquired in the Philippines by or on behalf
of the U.S. Armed Forces; as are vehicles, vessels, and aircraft operated by or for U.S. forces
in connection with activities under the VFA. The VFA likewise provide for the waiver of the
specific duties, taxes, charges, and fees that correspond to these equipment.

The third difference adverted to by the Justice Leonen's dissent is that the VFA contemplates the entry
of troops for training exercises, whereas EDCA allows the use of territory for launching military and
paramilitary operations conducted in other states. The dissent of Justice Teresita J. Leonardo-De Castro
also notes that VFA was intended for non-combat activides only, whereas the entry and activities of
U.S. forces into Agreed Locations were borne of military necessity or had a martial character, and were
therefore not contemplated by the VFA.
Rebuttal: This Court's jurisprudence however established in no uncertain terms that combat-
related activities, as opposed to actual combat, were allowed under the MDT and VFA, viz:

Both the history and intent of the Mutual Defense Treaty and the VFA support the conclusion
that combat-related activities as opposed to combat itself such as the one subject of the instant
petition, are indeed authorized.

Hence, even if EDCA was borne of military necessity, it cannot be said to have strayed from
the intent of the VFA since EDCA's combat-related components are allowed under the treaty.

Moreover, both the VFA and EDCA are silent on what these activities actually are. Both the
VFA and EDCA deal with the presence of U.S. forces within the Philippines, but make no
mention of being platforms for activity beyond Philippine territory. While it may be that, as
applied, military operations under either the VFA or EDCA would be carried out in the future
the scope of judicial review does not cover potential breaches of discretion but only actual
occurrences or blatantly illegal provisions. Hence, we cannot invalidate EDCA on the basis of
the potentially abusive use of its provisions.
The fourth difference is that EDCA supposedly introduces a new concept not contemplated in the VFA
or the MDT: Agreed Locations, Contractors, Pre-positioning, and Operational Control.
Rebuttal: As previously mentioned, these points shall be addressed fully and individually in
the latter analysis of EDCA's provisions. However, it must already be clarified that the terms
and details used by an implementing agreement need not be found in the mother treaty.
They must be sourced from the authority derived from the treaty, but are not necessarily
expressed word-for-word in the mother treaty.
The fifth difference highlighted by the Dissenting Opinion is that the VFA does not have provisions
that may be construed as a restriction on or modification of obligations found in existing statues,
including the jurisdiction of courts, local autonomy, and taxation. Implied in this argument is that
EDCA contains such restrictions or modifications.
Rebuttal: This last argument cannot be accepted in view of the clear provisions of EDCA.
Both the VFA and EDCA ensure Philippine jurisdiction in all instances contemplated by both
agreements, with the exception of those outlined by the VFA in Articles III-VI. In the VFA,
taxes are clearly waived whereas in EDCA, taxes are assumed by the government as will be
discussed later on. This fact does not, therefore, produce a diminution of jurisdiction on the
part of the Philippines, but rather a recognition of sovereignty and the rights that attend it,
some of which may be waived as in the cases under Articles III-VI of the VFA.

Taking off from these concerns, the provisions of EDCA must be compared with those of the MDT and
the VFA, which are the two treaties from which EDCA allegedly draws its validity.

a. Admission of U.S. military and civilian personnel into Philippine territory is already allowed under the VFA

We shall first deal with the recognition under EDCA of the presence in the country of three distinct classes of
individuals who will be conducting different types of activities within the Agreed Locations: (1) U.S. military
personnel; (2) U.S. civilian personnel; and (3) U.S. contractors.

A thorough evaluation of how EDCA is phrased clarities that the agreement does not deal with the entry into the
country of U.S. personnel and contractors per se. While the EDCA speaks of "the right to access and use" the
Agreed Locations, their wordings indicate the presumption that these groups have already been allowed entry
into Philippine territory, for which, unlike the VFA, EDCA has no specific provision.

By virtue of Articles I and III of the VFA, the Philippines already allows U.S. military and civilian personnel to
be "temporarily in the Philippines," so long as their presence is "in connection with activities approved by the
Philippine Government." The Philippines, through Article III, even guarantees that it shall facilitate the admission
of U.S. personnel into the country and grant exemptions from passport and visa regulations. The VFA does not
even limit their temporary presence to specific locations.

Therefore, the admission and presence of U.S. military and civilian personnel in Philippine territory are already
allowed under the VFA, the treaty supposedly being implemented by EDCA. What EDCA has effectively done,
in fact, is merely provide the mechanism to identify the locations in which U.S. personnel may perform
allowed activities pursuant to the VFA. As the implementing agreement, it regulates and limits the
presence of U.S. personnel in the country.

b. EDCA does not provide the legal basis for admission of U.S. contractors into Philippine territory; their
entry must be sourced from extraneous Philippine statutes and regulations for the admission of alien
employees or business persons.
Nowhere in EDCA are U.S. contractors guaranteed immediate admission into the Philippines. It merely grants
them the right of access to, and the authority to conduct certain activities within the Agreed Locations.

Consequently, it is neither mandatory nor obligatory on the part of the Philippines to admit U.S. contractors into
the country. We emphasize that the admission of aliens into Philippine territory is "a matter of pure permission
and simple tolerance which creates no obligation on the part of the government to permit them to stay." Unlike
U.S. personnel who are accorded entry accommodations, U.S. contractors are subject to Philippine immigration
laws. The latter must comply with our visa and passport regulations and prove that they are not subject to
exclusion under any provision of Philippine immigration laws The President may also deny them entry pursuant
to his absolute and unqualified power to prohibit or prevent the admission of aliens whose presence in the
country would be inimical to public interest.
In the same vein, the President may exercise the plenary power to expel or deport U.S. contractors as may be
necessitated by national security, public safety, public health, public morals, and national interest. They may also
be deported if they are found to be illegal or undesirable aliens pursuant to the Philippine Immigration Act and
the Data Privacy Act. In contrast, Article 111(5) of the VFA requires a request for removal from the Philippine
government before a member of the U.S. personnel may be "disposed outside of the Philippines."

c. Authorized activities of U.S. military and civilian personnel within Philippine territory are in furtherance of
the MDT and the VFA

Manifest in the provisions of the EDCA is the abundance of references to the creation of further "implementing
arrangements" including the identification of "activities to be approved by the Philippine Government." To
determine the parameters of these implementing arrangements and activities, we referred to the content, purpose,
and framework of the MDT and the VFA.

By its very language, the MDT contemplates a situation in which both countries shall engage in joint activities,
so that they can maintain and develop their defense capabilities. The wording itself evidently invites a reasonable
construction that the joint activities shall involve joint military trainings, maneuvers, and exercises. Both the
interpretation and the subsequent practice of the parties show that the MDT independently allows joint military
exercises in the country.

Lim v. Executive Secretary and Nicolas v. Romulo recognized that Balikatan exercises, which are activities
that seek to enhance and develop the strategic and technological capabilities of the parties to resist an
armed attack, "fall squarely under the provisions of the RP-US MDT."

In Lim, the Court especially noted that the Philippines and the U.S. continued to conduct joint military exercises
even after the expiration of the MBA and even before the conclusion of the VFA. These activities presumably
related to the Status of Forces Agreement, in which the parties agreed on the status to be accorded to U.S.
military and civilian personnel while conducting activities in the Philippines in relation to the MDT.

Further, it can be logically inferred from Article V of the MDT that these joint activities may be conducted on
Philippine or on U.S. soil. The article expressly provides that the term armed attack includes "an armed attack on
the metropolitan territory of either of the Parties, or on the island territories under its jurisdiction in the Pacific or
on its armed forces, public vessels or aircraft in the Pacific." Surely, in maintaining and developing our defense
capabilities, an assessment or training will need to be performed, separately and jointly by self-help and mutual
aid, in the territories of the contracting parties. It is reasonable to conclude that the assessment of defense
capabilities would entail understanding the terrain, wind flow patterns, and other environmental factors unique to
the Philippines.

It would also be reasonable to conclude that a simulation of how to respond to attacks in vulnerable areas would
be part of the training of the parties to maintain and develop their capacity to resist an actual armed attack and to
test and validate the defense plan of the Philippines. It is likewise reasonable to imagine that part of the training
would involve an analysis of the effect of the weapons that may be used and how to be prepared for the
eventuality. This Court recognizes that all of this may require training in the area where an armed attack might be
directed at the Philippine territory.

The provisions of the MDT must then be read in conjunction with those of the VFA. Article I of the VFA
indicates that the presence of U.S. military and civilian personnel in the Philippines is "in connection with
activities approved by the Philippine Government." While the treaty does not expressly enumerate or detail the
nature of activities of U.S. troops in the country, its Preamble makes explicit references to the reaffirmation of the
obligations of both countries under the MDT. These obligations include the strengthening of international and
regional security in the Pacific area and the promotion of common security interests.

What can be gleaned from the provisions of the VFA, the joint report of the Senate committees on foreign
relations and on national defense and security, and the ruling of this Court in Lim is that the "activities" referred
to in the treaty are meant to be specified and identified infurther agreements. EDCA is one such agreement
.
EDCA seeks to be an instrument that enumerates the Philippine-approved activities of U.S. personnel referred to
in the VFA. EDCA allows U.S. military and civilian personnel to perform "activities approved by the Philippines,
as those terms are defined in the VFA" and clarifies that these activities include those conducted within the
Agreed Locations:
1. Security cooperation exercises; joint and combined training activities; humanitarian assistance and
disaster relief activities; and such other activities as may be agreed upon by the Parties
2. Training; transit; support and related activities; refueling of aircraft; bunkering of vessels;
temporary maintenance of vehicles, vessels, and aircraft; temporary accommodation of personnel;
communications; prepositioning of equipment, supplies, and materiel; deployment of forces and
materiel; and such other activities as the Parties may agree
3. Exercise of operational control over the Agreed Locations for construction activities and other types
of activity, including alterations and improvements thereof
4. Exercise of all rights and authorities within the Agreed Locations that are necessary for their
operational control or defense, including the adoption of apfropriate measures to protect U.S. forces
and contractors
5. Use of water, electricity, and other public utilities
6. Operation of their own telecommunication systems, including the utilization of such means and
services as are required to ensure the full ability to operate telecommunication systems, as well as
the use of the necessary radio spectrum allocated for this purpose

According to Article I of EDCA, one of the purposes of these activities is to maintain and develop, jointly and by
mutual aid, the individual and collective capacities of both countries to resist an armed attack. It further states
that the activities are in furtherance of the MDT and within the context of the VFA.

***On the Duration of the activities mentioned in EDCA

Petitioners assert that the duration of the activities mentioned in EDCA is no longer consistent with the temporary
nature of the visits as contemplated in the VFA. They point out that Article XII(4) of EDCA has an initial term of
10 years, a term automatically renewed unless the Philippines or the U.S. terminates the agreement. According to
petitioners, such length of time already has a badge of permanency.

In connection with this, Justice Teresita J. Leonardo-De Castro likewise argues in her Concurring and Dissenting
Opinion that the VFA contemplated mere temporary visits from U.S. forces, whereas EDCA allows an unlimited
period for U.S. forces to stay in the Philippines.

However, the provisions of EDCA directly contradict this argument by limiting itself to 10 years of effectivity.
Although this term is automatically renewed, the process for terminating the agreement is unilateral and the right
to do so automatically accrues at the end of the 10 year period. Clearly, this method does not create a permanent
obligation.

Drawing on the reasoning in Lim, we also believe that it could not have been by chance that the VFA does not
include a maximum time limit with respect to the presence of U.S. personnel in the country. We construe this lack
of specificity as a deliberate effort on the part of the Philippine and the U.S. governments to leave out this aspect
and reserve it for the "adjustment in detail" stage of the implementation of the treaty. We interpret the subsequent,
unconditional concurrence of the Senate in the entire text of the VFA as an implicit grant to the President of a
margin of appreciation in determining the duration of the "temporary" presence of U.S. personnel in the country.

Justice Brion's dissent argues that the presence of U.S. forces under EDCA is "more permanent" in nature.
However, this argument has not taken root by virtue of a simple glance at its provisions on the effectivity period.
EDCA does not grant permanent bases, but rather temporary rotational access to facilities for efficiency.
The reasoning behind this interpretation is rooted in the constitutional role of the President who, as Commander-
in-Chief of our armed forces, is the principal strategist of the nation and, as such, duty-bound to defend our
national sovereignty and territorial integrity; who, as chief architect of our foreign relations, is the head
policymaker tasked to assess, ensure, and protect our national security and interests; who holds the most
comprehensive and most confidential information about foreign countries that may affect how we conduct our
external affairs; and who has unrestricted access to highly classified military intelligence data that may threaten
the life of the nation. Thus, if after a geopolitical prognosis of situations affecting the country, a belief is
engendered that a much longer period of military training is needed, the President must be given ample discretion
to adopt necessary measures including the flexibility to set an extended timetable.

Due to the sensitivity and often strict confidentiality of these concerns, we acknowledge that the President may
not always be able to candidly and openly discuss the complete situation being faced by the nation. The Chief
Executive's hands must not be unduly tied, especially if the situation calls for crafting programs and setting
timelines for approved activities. These activities may be necessary for maintaining and developing our capacity
to resist an armed attack, ensuring our national sovereignty and territorial integrity, and securing our national
interests. If the Senate decides that the President is in the best position to define in operational terms the meaning
of temporary in relation to the visits, considered individually or in their totality, the Court must respect that
policy decision. If the Senate feels that there is no need to set a time limit to these visits, neither should we.

Evidently, the fact that the VFA does not provide specificity in regard to the extent of the "temporary" nature of
the visits of U.S. personnel does not suggest that the duration to which the President may agree is unlimited.
Instead, the boundaries of the meaning of the term temporary in Article I of the treaty must be measured
depending on the purpose of each visit or activity. That purpose must be analyzed on a case-by-case basis
depending on the factual circumstances surrounding the conclusion of the implementing agreement. While the
validity of the President's actions will be judged under less stringent standards, the power of this Court to
determine whether there was grave abuse of discretion remains unimpaired.

d. Authorized activities performed by US. contractors within Philippine territory - who were
legitimately permitted to enter the country independent of EDCA - are subject to relevant Philippine
statutes and regulations and must be consistent with the MDT and the VFA
Petitioners also raise concerns about the U.S. government's purported practice of hiring private security
contractors in other countries. They claim that these contractors - one of which has already been
operating in Mindanao since 2004 - have been implicated in incidents or scandals in other parts of the
globe involving rendition, torture and other human rights violations. They also assert that these
contractors employ paramilitary forces in other countries where they are operating. Under Articles III
and IV of EDCA, U.S. contractors are authorized to perform only the following activities:
1. Training; transit; support and related activities; refueling of aircraft; bunkering of vessels;
temporary maintenance of vehicles, vessels, and aircraft; temporary accommodation of
personnel; communications; prepositioning of equipment, supplies, and materiel; deployment
of forces and materiel; and such other activities as the Parties may agree
2. Prepositioning and storage of defense equipment, supplies, and materiel, including delivery,
management, inspection, use, maintenance, and removal of such equipment, supplies and
materiel
3. Carrying out of matters in accordance with, and to the extent permissible under, U.S. laws,
regulations, and policies

EDCA requires that all activities within Philippine territory be in accordance with Philippine law. This
means that certain privileges denied to aliens are likewise denied to foreign military contractors.
Relevantly, providing security and carrying, owning, and possessing firearms are illegal for foreign
civilians.

The laws in place already address issues regarding the regulation of contractors. In the 2015 Foreign
Investment Negative list, the Executive Department has already identified corporations that have
equity restrictions in Philippine jurisdiction. Of note is No. 5 on the list - private security agencies that
cannot have any foreign equity by virtue of Section 4 of Republic Act No. 5487; and No. 15, which
regulates contracts for the construction of defense-related structures based on Commonwealth Act No.
541.
Hence, any other entity brought into the Philippines by virtue of EDCA must subscribe to corporate
and civil requirements imposed by the law, depending on the entity's corporate structure and the nature
of its business.

That Philippine laws extraneous to EDCA shall govern the regulation of the activities of U.S.
contractors has been clear even to some of the present members of the Senate.

For instance, in 2012, a U.S. Navy contractor, the Glenn Marine, was accused of spilling fuel in the
waters off Manila Bay. The Senate Committee on Foreign Relations and the Senate Committee on
Environment and Natural Resources chairperson claimed environmental and procedural violations by
the contractor. The U.S. Navy investigated the contractor and promised stricter guidelines to be
imposed upon its contractors. The statement attributed to Commander Ron Steiner of the public affairs
office of the U.S. Navy's 7th Fleet - that U.S. Navy contractors are bound by Philippine laws - is of
particular relevance. The statement acknowledges not just the presence of the contractors, but also the
U.S. position that these contractors are bound by the local laws of their host state. This stance was
echoed by other U.S. Navy representatives.

This incident simply shows that the Senate was well aware of the presence of U.S. contractors for the
purpose of fulfilling the terms of the VFA. That they are bound by Philippine law is clear to all, even to
the U.S.

As applied to EDCA, even when U.S. contractors are granted access to the Agreed Locations, all their
activities must be consistent with Philippine laws and regulations and pursuant to the MDT and the
VFA.

While we recognize the concerns of petitioners, they do not give the Court enough justification to
strike down EDCA. In Lim v. Executive Secretary, we have already explained that we cannot take
judicial notice of claims aired in news reports, "not because of any issue as to their truth, accuracy, or
impartiality, but for the simple reason that facts must be established in accordance with the rules of
evidence." What is more, we cannot move one step ahead and speculate that the alleged illegal
activities of these contractors in other countries would take place in the Philippines with certainty. As
can be seen from the above discussion, making sure that U.S. contractors comply with Philippine laws
is a function of law enforcement. EDCA does not stand in the way of law enforcement.

Nevertheless, we emphasize that U.S. contractors are explicitly excluded from the coverage of the
VFA. As visiting aliens, their entry, presence, and activities are subject to all laws and treaties
applicable within the Philippine territory. They may be refused entry or expelled from the country if
they engage in illegal or undesirable activities. There is nothing that prevents them from being detained
in the country or being subject to the jurisdiction of our courts. Our penal laws, labor laws, and
immigrations laws apply to them and therefore limit their activities here. Until and unless there is
another law or treaty that specifically deals with their entry and activities, their presence in the country
is subject to unqualified Philippine jurisdiction.
 EDCA does not allow the presence of U.S.-owned or -controlled military facilities and bases in the
Philippines

Petitioners Saguisag et al. claim that EDCA permits the establishment of U.S. military bases through the "euphemistically"
termed "Agreed Locations. " Alluding to the definition of this term in Article II(4) of EDCA, they point out that these
locations are actually military bases, as the definition refers to facilities and areas to which U.S. military forces have access
for a variety of purposes. Petitioners claim that there are several badges of exclusivity in the use of the Agreed Locations by
U.S. forces. First, Article V(2) of EDCA alludes to a "return" of these areas once they are no longer needed by U.S. forces,
indicating that there would be some transfer of use. Second, Article IV(4) ofEDCA talks about American forces' unimpeded
access to the Agreed Locations for all matters relating to the prepositioning and storage of U.S. military equipment, supplies,
and materiel. Third, Article VII of EDCA authorizes U.S. forces to use public utilities and to operate their own
telecommunications system.

a. Preliminary point on badges of exclusivity

As a preliminary observation, petitioners have cherry-picked provisions of EDCA by presenting so-called "badges of
exclusivity," despite the presence of contrary provisions within the text of the agreement itself.

First, they clarify the word "return" in Article V(2) of EDCA. However, the use of the word "return" is within the context of a
lengthy provision. The provision as a whole reads as follows:
The United States shall return to the Philippines any Agreed Locations, or any portion thereof, including non-relocatable
structures and assemblies constructed, modified, or improved by the United States, once no longer required by United States
forces for activities under this Agreement. The Parties or the Designated Authorities shall consult regarding the terms of return
of any Agreed Locations, including possible compensation for improvements or construction.

The context of use is "required by United States forces for activities under this Agreement." Therefore, the return of an Agreed
Location would be within the parameters of an activity that the Mutual Defense Board (MDB) and the Security Engagement
Board (SEB) would authorize. Thus, possession by the U.S. prior to its return of the Agreed Location would be based on the
authority given to it by a joint body co-chaired by the "AFP Chief of Staff and Commander, U.S. PACOM with
representatives from the Philippines' Department of National Defense and Department of Foreign Affairs sitting as
members." The terms shall be negotiated by both the Philippines and the U.S., or through their Designated Authorities. This
provision, seen as a whole, contradicts petitioners' interpretation of the return as a "badge of exclusivity." In fact, it shows the
cooperation and partnership aspect of EDCA in full bloom.

Second, the term "unimpeded access" must likewise be viewed from a contextual perspective. Article IV(4) states that U.S.
forces and U.S. contractors shall have "unimpeded access to Agreed Locations for all matters relating to the prepositioning
and storage of defense equipment, supplies, and materiel, including delivery, management, inspection, use, maintenance, and
removal of such equipment, supplies and materiel."

At the beginning of Article IV, EDCA states that the Philippines gives the U.S. the authority to bring in these equipment,
supplies, and materiel through the MDB and SEB security mechanism. These items are owned by the U.S., are exclusively for
the use of the U.S. and, after going through the joint consent mechanisms of the MDB and the SEB, are within the control of
the U.S. More importantly, before these items are considered prepositioned, they must have gone through the process of prior
authorization by the MDB and the SEB and given proper notification to the AFP.

Therefore, this "unimpeded access" to the Agreed Locations is a necessary adjunct to the ownership, use, and control of the
U.S. over its own equipment, supplies, and materiel and must have first been allowed by the joint mechanisms in play
between the two states since the time of the MDT and the VFA. It is not the use of the Agreed Locations that is exclusive per
se; it is mere access to items in order to exercise the rights of ownership granted by virtue of the Philippine Civil Code. 318
As for the view that EDCA authorizes U.S. forces to use public utilities and to operate their own telecommunications system,
it will be met and answered in part D, infra.

Petitioners also point outthat EDCA is strongly reminiscent of and in fact bears a one-to-one correspondence with the
provisions of the 1947 MBA. They assert that both agreements (a) allow similar activities within the area; (b) provide for the
same "species of ownership" over facilities; and (c) grant operational control over the entire area. Finally, they argue 320 that
EDCA is in fact an implementation of the new defense policy of the U.S. According to them, this policy was not what was
originally intended either by the MDT or by the VFA.
On these points, the Court is not persuaded.

The similar activities cited by petitioners simply show that under the MBA, the U.S. had the right to construct, operate,
maintain, utilize, occupy, garrison, and control the bases. The so-called parallel provisions of EDCA allow only operational
control over the Agreed Locations specifically for construction activities. They do not allow the overarching power to operate,
maintain, utilize, occupy, garrison, and control a base with full discretion. EDCA in fact limits the rights of the U.S. in respect
of every activity, including construction, by giving the MDB and the SEB the power to determine the details of all activities
such as, but not limited to, operation, maintenance, utility, occupancy, garrisoning, and control.
The "species of ownership" on the other hand, is distinguished by the nature of the property. For immovable property
constructed or developed by the U.S., EDCA expresses that ownership will automatically be vested to the Philippines. 323 On
the other hand, for movable properties brought into the Philippines by the U.S., EDCA provides that ownership is retained by
the latter. In contrast, the MBA dictates that the U.S. retains ownership over immovable and movable properties.
To our mind, both EDCA and the MBA simply incorporate what is already the law of the land in the Philippines. The Civil
Code's provisions on ownership, as applied, grant the owner of a movable property full rights over that property, even if
located in another person's property.
The parallelism, however, ends when the situation involves facilities that can be considered immovable. Under the MBA, the
U.S. retains ownership if it paid for the facility. Under EDCA, an immovable is owned by the Philippines, even if built
completely on the back of U.S. funding. This is consistent with the constitutional prohibition on foreign land ownership. 327
Despite the apparent similarity, the ownership of property is but a part of a larger whole that must be considered before the
constitutional restriction is violated. Thus, petitioners' points on operational control will be given more attention in the
discussion below. The arguments on policy are, however, outside the scope of judicial review and will not be discussed
Moreover, a direct comparison of the MBA and EDCA will result in several important distinctions that would allay suspicion
that EDCA is but a disguised version of the MBA.

b. There are substantial matters that the US. cannot do under EDCA, but which it was authorized to do under the 1947 MBA
The Philippine experience with U.S. military bases under the 1947 MBA is simply not possible under EDCA for a number of
important reasons.
First, in the 1947 MBA, the U.S. retained all rights of jurisdiction in and over Philippine territory occupied by American
bases. In contrast, the U.S. under EDCA does not enjoy any such right over any part of the Philippines in which its forces or
equipment may be found.

Second, in the bases agreement, the U.S. and the Philippines were visibly not on equal footing when it came to deciding
whether to expand or to increase the number of bases, as the Philippines may be compelled to negotiate with the U.S. the
moment the latter requested an expansion of the existing bases or to acquire additional bases. In EDCA, U.S. access is purely
at the invitation of the Philippines.

Third, in EDCA, the Philippines is- guaranteed access over the entire area of the Agreed Locations. On the other hand, given
that the U.S. had complete control over its military bases under the 1947 MBA, the treaty did not provide for any express
recognition of the right of access of Philippine authorities. Without that provision and in light of the retention of U.S.
sovereignty over the old military bases, the U.S. could effectively prevent Philippine authorities from entering those bases.

Fourth, in the bases agreement, the U.S. retained the right, power, and authority over the establishment, use, operation,
defense, and control of military bases, including the limits of territorial waters and air space adjacent to or in the vicinity of
those bases. The only standard used in determining the extent of its control was military necessity. On the other hand, there is
no such grant of power or authority under EDCA. It merely allows the U.S. to exercise operational control over the
construction of Philippine-owned structures and facilities.

Fifth, the U.S. under the bases agreement was given the authority to use Philippine territory for additional staging areas,
bombing and gunnery ranges. No such right is given under EDCA, as seen below.

Sixth, under the MBA, the U.S. was given the right, power, and authority to control and prohibit the movement and operation
of all types of vehicles within the vicinity of the bases. The U.S. does not have any right, power, or authority to do so under
EDCA.

Seventh, under EDCA, the U.S. is merely given temporary access to land and facilities (including roads, ports, and airfields).
On the other hand, the old treaty gave the U.S. the right to improve and deepen the harbors, channels, entrances, and
anchorages; and to construct or maintain necessary roads and bridges that would afford it access to its military bases.

Eighth, in the 1947 MBA, the U.S. was granted the automatic right to use any and all public utilities, services and facilities,
airfields, ports, harbors, roads, highways, railroads, bridges, viaducts, canals, lakes, rivers, and streams in the Philippines in
the same manner that Philippine military forces enjoyed that right. No such arrangement appears in EDCA. In fact, it merely
extends to U.S. forces temporary access to public land and facilities when requested.

Ninth, under EDCA, the U.S. no longer has the right, power, and authority to construct, install, maintain, and employ any type
of facility, weapon, substance, device, vessel or vehicle, or system unlike in the old treaty. EDCA merely grants the U.S.,
through bilateral security mechanisms, the authority to undertake construction, alteration, or improvements on the Philippine-
owned Agreed Locations.

Tenth, EDCA does not allow the U.S. to acquire, by condemnation or expropriation proceedings, real property belonging to
any private person. The old military bases agreement gave this right to the U.S.

Eleventh, EDCA does not allow the U.S. to unilaterally bring into the country non-Philippine nationals who are under its
employ, together with their families, in connection with the construction, maintenance, or operation of the bases. EDCA
strictly adheres to the limits under the VFA.
Twelfth, EDCA does not allow the U.S. to exercise jurisdiction over any offense committed by any person within the Agreed
Locations, unlike in the former military bases.
Thirteenth, EDCA does not allow the U.S. to operate military post exchange (PX) facilities, which is free of customs duties
and taxes, unlike what the expired MBA expressly allowed. Parenthetically, the PX store has become the cultural icon of U.S.
military presence in the country.

In sum, EDCA is a far cry from a basing agreement as was understood by the people at the time that
the 1987 Constitution was adopted. Nevertheless, a comprehensive review of what the Constitution
means by "foreign military bases" and "facilities" is required before EDCA can be deemed to have
passed judicial scrutiny.

c. The meaning of military facilities and bases

An appreciation of what a military base is, as understood by the Filipino people in 1987, would be vital
in determining whether EDCA breached the constitutional restriction.

Prior to the drafting of the 1987 Constitution, the last definition of "military base" was provided under
Presidential Decree No. (PD) 1227. Unlawful entry into a military base is punishable under the decree
as supported by Article 281 of the Revised Penal Code, which itself prohibits the act of trespass.
Section 2 of the law defines the term in this manner: Military base' as used in this decree means any
military, air, naval, or coast guard reservation, base, fort, camp, arsenal, yard, station, or installation in
the Philippines.
.
The latest agreement is EDCA, which proposes a novel concept termed "Agreed Locations."
By definition, Agreed Locations are facilities and areas that are provided by the Government of the
Philippines through the AFP and that United States forces, United States contractors, and others as
mutually agreed, shall have the right to access and use pursuant to this Agreement. Such Agreed
Locations may be listed in an annex to be appended to this Agreement, and may be further described in
implementing arrangements.

Preliminarily, respondent already claims that the proviso that the Philippines shall retain ownership of
and title to the Agreed Locations means that EDCA is "consistent with Article II of the VFA which
recognizes Philippine sovereignty and jurisdiction over locations within Philippine territory.

By this interpretation, respondent acknowledges that the contention of petitioners springs from an
understanding that the Agreed Locations merely circumvent the constitutional restrictions. Framed
differently, the bone of contention is whether the Agreed Locations are, from a legal perspective,
foreign military facilities or bases. This legal framework triggers Section 25, Article XVIII, and makes
Senate concurrence a sine qua non.

Article III of EDCA provides for Agreed Locations, in which the U.S. is authorized by the Philippines
to "conduct the following activities: "training; transit; support and related activities; refueling of
aircraft; bunkering of vessels; temporary maintenance of vehicles, vessels and aircraft; temporary
accommodation of personnel; communications; prepositioning of equipment, supplies and materiel;
deploying forces and materiel; and such other activities as the Parties may agree."

This creation of EDCA must then be tested against a proper interpretation of the Section 25 restriction.

d. Reasons for the constitutional requirements and legal standards for constitutionally compatible
military bases and facilities
Section 25 does not define what is meant by a "foreign military facility or base." While it specifically
alludes to U.S. military facilities and bases that existed during the framing of the Constitution, the
provision was clearly meant to apply to those bases existing at the time and to any future facility or
base. The basis for the restriction must first be deduced from the spirit of the law, in order to set a
standard for the application of its text, given the particular historical events preceding the agreement.
Once more, we must look to the 1986 Constitutional Commissioners to glean, from their collective
wisdom, the intent of Section 25. Their speeches are rich with history and wisdom and present a clear
picture of what they considered in the crafting the provision.

In Taada v. Angara, the Court ruled that independence does not mean the absence of foreign
participation:
Furthermore, the constitutional policy of a "self-reliant and independent national
economy" does not necessarily rule out the entry of foreign investments, goods and services. It
contemplates neither "economic seclusion" nor "mendicancy in the international community."
As explained by Constitutional Commissioner Bernardo Villegas, sponsor of this constitutional
policy:
Economic self reliance is a primary objective of a developing country that is keenly
aware of overdependence on external assistance for even its most basic needs. It does
not mean autarky or economic seclusion; rather, it means avoiding mendicancy in the
international community. Independence refers to the freedom from undue foreign
control of the national economy, especially in such strategic industries as in the
development of natural resources and public utilities. (Emphases supplied)

The heart of the constitutional restriction on foreign military facilities and bases is therefore the
assertion of independence from the U.S. and other foreign powers, as independence is exhibited by the
degree of foreign control exerted over these areas. The essence of that independence is self-governance
and self-control. Independence itself is "the state or condition of being free from dependence,
subjection, or control."

Petitioners assert that EDCA provides the U.S. extensive control and authority over Philippine facilities
and locations, such that the agreement effectively violates Section 25 of the 1987 Constitution.

Under Article VI(3) of EDCA, U.S. forces are authorized to act as necessary for "operational control
and defense." The term "operational control" has led petitioners to regard U.S. control over the Agreed
Locations as unqualified and, therefore, total. Petitioners contend that the word "their" refers to the
subject "Agreed Locations."

This argument misreads the text, which is quoted below:

United States forces are authorized to exercise all rights and authorities within Agreed
Locations that are necessary for their operational control or defense, including taking
appropriate measure to protect United States forces and United States contractors. The United
States should coordinate such measures with appropriate authorities of the Philippines.

A basic textual construction would show that the word "their," as understood above, is a possessive
pronoun for the subject "they," a third-person personal pronoun in plural form. Thus, "their" cannot be
used for a non-personal subject such as "Agreed Locations." The simple grammatical conclusion is that
"their" refers to the previous third-person plural noun, which is "United States forces." This conclusion
is in line with the definition of operational control.
a. U.S. operational control as the exercise of authority over U.S. personnel, and not over the
Agreed Locations
b. Operational control vis--vis effective command and control
c. Limited operational control over the Agreed Locations only for construction activitites
***International Law on Attacking Agreed Locations
In the first place, international law disallows any attack on the Agreed Locations simply because of the
presence of U.S. personnel. Article 2(4) of the United Nations Charter states that "All Members shall
refrain in their international relations from the threat or use of force against the territorial integrity or
political independence of any state, or in any other manner inconsistent with the Purposes of the United
Nations." Any unlawful attack on the Philippines breaches the treaty, and triggers Article 51 of the
same charter, which guarantees the inherent right of individual or collective self-defence.

Moreover, even if the lawfulness of the attack were not in question, international humanitarian law
standards prevent participants in an armed conflict from targeting non-participants. International
humanitarian law, which is the branch of international law applicable to armed conflict, expressly
limits allowable military conduct exhibited by forces of a participant in an armed conflict. Under this
legal regime, participants to an armed conflict are held to specific standards of conduct that require
them to distinguish between combatants and non-combatants, as embodied by the Geneva Conventions
and their Additional Protocols.

Corollary to this point, Professor John Woodcliffe, professor of international law at the University of
Leicester, noted that there is no legal consensus for what constitutes a base, as opposed to other terms
such as "facilities" or "installation."422 In strategic literature, "base" is defined as an installation "over
which the user State has a right to exclusive control in an extraterritorial sense." 423 Since this definition
would exclude most foreign military installations, a more important distinction must be made.

For Woodcliffe, a type of installation excluded from the definition of "base" is one that does not fulfill
a combat role. He cites an example of the use of the territory of a state for training purposes, such as to
obtain experience in local geography and climactic conditions or to carry out joint exercises. 424 Another
example given is an advanced communications technology installation for purposes of information
gathering and communication.425Unsurprisingly, he deems these non-combat uses as borderline
situations that would be excluded from the functional understanding of military bases and
installations.426

By virtue of this ambiguity, the laws of war dictate that the status of a building or person is presumed
to be protected, unless proven otherwise.427 Moreover, the principle of distinction requires combatants
in an armed conflict to distinguish between lawful targets 428 and protected targets.429 In an actual armed
conflict between the U.S. and a third state, the Agreed Locations cannot be considered U.S. territory,
since ownership of territory even in times of armed conflict does not change. 430

Hence, any armed attack by forces of a third state against an Agreed Location can only be legitimate
under international humanitarian law if it is against a bona fide U.S. military base, facility, or
installation that directly contributes to the military effort of the U.S. Moreover, the third state's forces
must take all measures to ensure that they have complied with the principle of distinction (between
combatants and non-combatants).

There is, then, ample legal protection for the Philippines under international law that would ensure its
territorial integrity and national security in the event an Agreed Location is subjected to attack. As
EDCA stands, it does not create the situation so feared by petitioners - one in which the Philippines,
while not participating in an armed conflict, would be legitimately targeted by an enemy of the U.S.431
In the second place, this is a policy question about the wisdom of allowing the presence of U.S.
personnel within our territory and is therefore outside the scope of judicial review.
Evidently, the concept of giving foreign troops access to "agreed" locations, areas, or facilities within
the military base of another sovereign state is nothing new on the international plane. In fact, this
arrangement has been used as the framework for several defense cooperation agreements, such as in
the following:
1. 2006 U.S.-Bulgaria Defense Cooperation Agreement
2. 2009 U.S.-Colombia Defense Cooperation Agreement
3. 2009 U.S.-Poland Status of Forces Agreement
4. 2014 U.S.-Australia Force Posture Agreement
5. 2014 U.S.-Afghanistan Security and Defense Cooperation Agreement

In all of these arrangements, the host state grants U.S. forces access to their military bases. That access
is without rental or similar costs to the U.S. Further, U.S. forces are allowed to undertake construction
activities in, and make alterations and improvements to, the agreed locations, facilities, or areas. As in
EDCA, the host states retain ownership and jurisdiction over the said bases.

In fact, some of the host states in these agreements give specific military-related rights to the U.S. For
example, under Article IV(l) of the US.-Bulgaria Defense Cooperation Agreement, "the United States
forces x x x are authorized access to and may use agreed facilities and areas x x x for staging and
deploying of forces and materiel, with the purpose of conducting x x x contingency operations and
other missions, including those undertaken in the framework of the North Atlantic Treaty." In some of
these agreements, host countries allow U.S. forces to construct facilities for the latters exclusive use.

Troop billeting, including construction of temporary structures, is nothing new. In Lim v. Executive
Secretary, the Court already upheld the Terms of Reference of Balikatan 02-1, which authorized U.S.
forces to set up "temporary structures such as those for troop billeting, classroom instruction and
messing during the Exercise." Similar provisions are also in the Mutual Logistics Support Agreement
of 2002 and 2007, which are essentially executive agreements that implement the VFA, the MDT, and
the 1953 Military Assistance Agreement. These executive agreements similarly tackle the "reciprocal
provision of logistic support, supplies, and services," which include "billeting, operations support (and
construction and use of temporary structures incident to operations support), training services, storage
services, during an approved activity." These logistic supplies, support, and services include temporary
use of "nonlethal items of military equipment which are not designated as significant military
equipment on the U.S. Munitions List, during an approved activity." The first Mutual Logistics Support
Agreement has lapsed, while the second one has been extended until 2017 without any formal
objection before this Court from the Senate or any of its members.

The provisions in EDCA dealing with Agreed Locations are analogous to those in the aforementioned
executive agreements. Instead of authorizing the building of temporary structures as previous
agreements have done, EDCA authorizes the U.S. to build permanent structures or alter or improve
existing ones for, and to be owned by, the Philippines. EDCA is clear that the Philippines retains
ownership of altered or improved facilities and newly constructed permanent or non-relocatable
structures. Under EDCA, U.S. forces will also be allowed to use facilities and areas for "training;
support and related activities; temporary accommodation of personnel; communications" and agreed
activities.

Concerns on national security problems that arise from foreign military equipment being present in the
Philippines must likewise be contextualized. Most significantly, the VFA already authorizes the
presence of U.S. military equipment in the country. Article VII of the VFA already authorizes the U.S.
to import into or acquire in the Philippines "equipment, materials, supplies, and other property" that
will be used "in connection with activities" contemplated therein. The same section also recognizes that
"title to such property shall remain" with the US and that they have the discretion to "remove such
property from the Philippines at any time."
There is nothing novel, either, in the EDCA provision on the prepositioning and storing of "defense
equipment, supplies, and materiel," since these are sanctioned in the VFA. In fact, the two countries
have already entered into various implementing agreements in the past that are comparable to the
present one. The Balikatan 02-1 Terms of Reference mentioned in Lim v. Executive
Secretary specifically recognizes that Philippine and U.S. forces "may share in the use of their
resources, equipment and other assets." Both the 2002 and 2007 Mutual Logistics Support Agreements
speak of the provision of support and services, including the "construction and use of temporary
structures incident to operations support" and "storage services" during approved activities. These
logistic supplies, support, and services include the "temporary use of x x x nonlethal items of military
equipment which are not designated as significant military equipment on the U.S. Munitions List,
during an approved activity." Those activities include "combined exercises and training, operations and
other deployments" and "cooperative efforts, such as humanitarian assistance, disaster relief and rescue
operations, and maritime anti-pollution operations" within or outside Philippine territory. Under
EDCA, the equipment, supplies, and materiel that will be prepositioned at Agreed Locations include
"humanitarian assistance and disaster relief equipment, supplies, and materiel." Nuclear weapons are
specifically excluded from the materiel that will be prepositioned.

Therefore, there is no basis to invalidate EDCA on fears that it increases the threat to our national
security. If anything, EDCA increases the likelihood that, in an event requiring a defensive response,
the Philippines will be prepared alongside the U.S. to defend its islands and insure its territorial
integrity pursuant to a relationship built on the MDT and VFA.

Others issues and concerns raised

A point was raised during the oral arguments that the language of the MDT only refers to mutual help
and defense in the Pacific area. We believe that any discussion of the activities to be undertaken under
EDCA vis-a-vis the defense of areas beyond the Pacific is premature. We note that a proper petition on
that issue must be filed before we rule thereon. We also note that none of the petitions or memoranda
has attempted to discuss this issue, except only to theorize that the U.S. will not come to our aid in the
event of an attack outside of the Pacific. This is a matter of policy and is beyond the scope of this
judicial review.

In reference to the issue on telecommunications, suffice it to say that the initial impression of the
facility adverted to does appear to be one of those that require a public franchise by way of
congressional action under Section 11, Article XII of the Constitution. As respondents submit,
however, the system referred to in the agreement does not provide telecommunications services to the
public for compensation. It is clear from Article VIl(2) of EDCA that the telecommunication system is
solely for the use of the U.S. and not the public in general, and that this system will not interfere with
that which local operators use. Consequently, a public franchise is no longer necessary.

Additionally, the charge that EDCA allows nuclear weapons within Philippine territory is entirely
speculative. It is noteworthy that the agreement in fact specifies that the prepositioned materiel shall
not include nuclear weapons. Petitioners argue that only prepositioned nuclear weapons are prohibited
by EDCA; and that, therefore, the U.S. would insidiously bring nuclear weapons to Philippine
territory. The general prohibition on nuclear weapons, whether prepositioned or not, is already
expressed in the 1987 Constitution. It would be unnecessary or superfluous to include all prohibitions
already in the Constitution or in the law through a document like EDCA.

Finally, petitioners allege that EDCA creates a tax exemption, which under the law must originate from
Congress. This allegation ignores jurisprudence on the government's assumption of tax liability. EDCA
simply states that the taxes on the use of water, electricity, and public utilities are for the account of the
Philippine Government. This provision creates a situation in which a contracting party assumes the tax
liability of the other. In National Power Corporation v. Province of Quezon, we distinguished between
enforceable and unenforceable stipulations on the assumption of tax liability. Afterwards, we
concluded that an enforceable assumption of tax liability requires the party assuming the liability to
have actual interest in the property taxed. This rule applies to EDCA, since the Philippine Government
stands to benefit not only from the structures to be built thereon or improved, but also from the joint
training with U.S. forces, disaster preparation, and the preferential use of Philippine suppliers. Hence,
the provision on the assumption of tax liability does not constitute a tax exemption as petitioners have
posited.

Additional issues were raised by petitioners, all relating principally to provisions already sufficiently
addressed above. This Court takes this occasion to emphasize that the agreement has been construed
herein as to absolutely disauthorize the violation of the Constitution or any applicable statute. On the
contrary, the applicability of Philippine law is explicit in EDCA.

EPILOGUE

The fear that EDCA is a reincarnation of the U.S. bases so zealously protested by noted personalities in
Philippine history arises not so much from xenophobia, but from a genuine desire for self-
determination, nationalism, and above all a commitment to ensure the independence of the Philippine
Republic from any foreign domination.

Mere fears, however, cannot curtail the exercise by the President of the Philippines of his
Constitutional prerogatives in respect of foreign affairs. They cannot cripple him when he deems that
additional security measures are made necessary by the times. As it stands, the Philippines through the
Department of Foreign Affairs has filed several diplomatic protests against the actions of the People's
Republic of China in the West Philippine Sea; initiated arbitration against that country under the United
Nations Convention on the Law of the Sea; is in the process of negotiations with the Moro Islamic
Liberation Front for peace in Southern Philippines, which is the subject of a current case before this
Court; and faces increasing incidents of kidnappings of Filipinos and foreigners allegedly by the Abu
Sayyaf or the New People's Army. The Philippine military is conducting reforms that seek to ensure the
security and safety of the nation in the years to come. In the future, the Philippines must navigate a
world in which armed forces fight with increasing sophistication in both strategy and technology, while
employing asymmetric warfare and remote weapons.

Additionally, our country is fighting a most terrifying enemy: the backlash of Mother Nature. The
Philippines is one of the countries most directly affected and damaged by climate change. It is no
coincidence that the record-setting tropical cyclone Yolanda (internationally named Haiyan), one of the
most devastating forces of nature the world has ever seen hit the Philippines on 8 November 2013 and
killed at least 6,000 people. This necessitated a massive rehabilitation project. In the aftermath, the
U.S. military was among the first to extend help and support to the Philippines.

That calamity brought out the best in the Filipinos as thousands upon thousands volunteered their help,
their wealth, and their prayers to those affected. It also brought to the fore the value of having friends
in the international community.

In order to keep the peace in its archipelago in this region of the world, and to sustain itself at the same
time against the destructive forces of nature, the Philippines will need friends. Who they are, and what
form the friendships will take, are for the President to decide. The only restriction is what the
Constitution itself expressly prohibits. It appears that this overarching concern for balancing
constitutional requirements against the dictates of necessity was what led to EDCA.

As it is, EDCA is not constitutionally infirm. As an executive agreement, it remains consistent with
existing laws and treaties that it purports to implement.

WHEREFORE, we hereby DISMISS the petitions.

SO ORDERED.
 [G.R. No. 138570. October 10, 2000]
BAYAN (Bagong Alyansang Makabayan), a JUNK VFA MOVEMENT, BISHOP TOMAS MILLAMENA
(Iglesia Filipina Independiente), BISHOP ELMER BOLOCAN (United Church of Christ of the Phil.), DR.
REYNALDO LEGASCA, MD, KILUSANG MAMBUBUKID NG PILIPINAS, KILUSANG MAYO UNO,
GABRIELA, PROLABOR, and the PUBLIC INTEREST LAW CENTER, petitioners, vs. EXECUTIVE
SECRETARY RONALDO ZAMORA, FOREIGN AFFAIRS SECRETARY DOMINGO SIAZON,
DEFENSE SECRETARY ORLANDO MERCADO, BRIG. GEN. ALEXANDER AGUIRRE, SENATE
PRESIDENT MARCELO FERNAN, SENATOR FRANKLIN DRILON, SENATOR BLAS OPLE,
SENATOR RODOLFO BIAZON, and SENATOR FRANCISCO TATAD, respondents.

BUENA, J.:
March 14, 1947, the Philippines and the United States of America forged a Military Bases Agreement
which formalized, among others, the use of installations in the Philippine territory by United States
military personnel.
August 30, 1951- Mutual Defense Treaty- to further strengthen their defense and security relationship.
Under the treaty, the parties agreed to respond to any external armed attack on their territory, armed
forces, public vessels, and aircraft.
RP-US MBA expitation in 1991
RP-US Treaty of Friendship, Cooperation and Security- would have extended the presence of US
military bases in the Philippines.- Rejected by the Senate.
With the expiration of the RP-US Military Bases Agreement, the periodic military exercises conducted
between the two countries were held in abeyance. Notwithstanding, the defense and security relationship
between the Philippines and the United States of America continued pursuant to the Mutual Defense
Treaty.
1997, the United States panel, headed by US Defense Deputy Assistant Secretary for Asia Pacific Kurt
Campbell, met with the Philippine panel, headed by Foreign Affairs Undersecretary Rodolfo Severino
Jr., to exchange notes on the complementing strategic interests of the United States and the Philippines
in the Asia-Pacific region. Both sides discussed, among other things, the possible elements of the
Visiting Forces Agreement (VFA).
Negotiations by both panels on the VFA led to a consolidated draft text, which in turn resulted to a final
series of conferences and negotiations that culminated in Manila on January 12 and 13, 1998. Thereafter,
then President Fidel V. Ramos approved the VFA, which was respectively signed by public respondent
Secretary Siazon and Unites States Ambassador Thomas Hubbard on February 10, 1998.
On October 5, 1998, President Joseph E. Estrada, through respondent Secretary of Foreign Affairs,
ratified the VFA.
On October 6, 1998, the President, acting through respondent Executive Secretary Ronaldo Zamora,
officially transmitted to the Senate of the Philippines, the Instrument of Ratification, the letter of the
President and the VFA, for concurrence. The Senate, in turn, referred the VFA to its Committee on
Foreign Relations, chaired by Senator Blas F. Ople, and its Committee on National Defense and
Security, chaired by Senator Rodolfo G. Biazon, for their joint consideration and
recommendation. Thereafter, joint public hearings were held by the two Committees.
On May 3, 1999, the Committees submitted Proposed Senate Resolution No. 443 recommending the
concurrence of the Senate to the VFA and the creation of a Legislative Oversight Committee to oversee
its implementation. Debates then ensued.
On May 27, 1999, Proposed Senate Resolution No. 443 was approved by the Senate, by a two-thirds
(2/3) voteof its members. Senate Resolution No. 443 was then re-numbered as Senate Resolution No.
18.
On June 1, 1999, the VFA officially entered into force after an Exchange of Notes between respondent
Secretary Siazon and United States Ambassador Hubbard.
The VFA, which consists of a Preamble and nine (9) Articles, provides for the mechanism for regulating
the circumstances and conditions under which US Armed Forces and defense personnel may be present
in the Philippines.

Via these consolidated petitions for certiorari and prohibition, petitioners - as legislators, non-governmental
organizations, citizens and taxpayers - assail the constitutionality of the VFA and impute to herein respondents
grave abuse of discretion in ratifying the agreement.
ISSUE
WON the VFA is constitutional

RULING
APPLICABLE CONSTITUTIONAL PROVISION

One focal point of inquiry in this controversy is the determination of which provision of the
Constitution applies, with regard to the exercise by the senate of its constitutional power to concur with
the VFA. Petitioners argue that Section 25, Article XVIII is applicable considering that the VFA has for
its subject the presence of foreign military troops in the Philippines. Respondents, on the contrary,
maintain that Section 21, Article VII should apply inasmuch as the VFA is not a basing arrangement
but an agreement which involves merely the temporary visits of United States personnel engaged in
joint military exercises.

The 1987 Philippine Constitution contains two provisions requiring the concurrence of the Senate on
treaties or international agreements. Section 21, Article VII, which herein respondents invoke, reads:
No treaty or international agreement shall be valid and effective unless concurred in by at least two-
thirds of all the Members of the Senate.

Section 25, Article XVIII, provides:

After the expiration in 1991 of the Agreement between the Republic of the Philippines and
the United States of America concerning Military Bases, foreign military bases, troops, or
facilities shall not be allowed in the Philippines except under a treaty duly concurred in by
the senate and, when the Congress so requires, ratified by a majority of the votes cast by the
people in a national referendum held for that purpose, and recognized as a treaty by the
other contracting State.

Section 21, Article VII deals with treatise or international agreements in general, in which case, the
concurrence of at least two-thirds (2/3) of all the Members of the Senate is required to make the subject
treaty, or international agreement, valid and binding on the part of the Philippines. This provision lays
down the general rule on treatise or international agreements and applies to any form of treaty with a
wide variety of subject matter, such as, but not limited to, extradition or tax treatise or those economic
in nature. All treaties or international agreements entered into by the Philippines, regardless of subject
matter, coverage, or particular designation or appellation, requires the concurrence of the Senate to be
valid and effective.

In contrast, Section 25, Article XVIII is a special provision that applies to treaties which involve the
presence of foreign military bases, troops or facilities in the Philippines. Under this provision, the
concurrence of the Senate is only one of the requisites to render compliance with the constitutional
requirements and to consider the agreement binding on the Philippines. Section 25, Article XVIII
further requires that foreign military bases, troops, or facilities may be allowed in the Philippines only
by virtue of a treaty duly concurred in by the Senate, ratified by a majority of the votes cast in a
national referendum held for that purpose if so required by Congress, and recognized as such by the
other contracting state.
I
t is our considered view that both constitutional provisions, far from contradicting each other, actually
share some common ground. Additionally, in both instances, the concurrence of the Senate is
indispensable to render the treaty or international agreement valid and effective.

To our mind, the fact that the President referred the VFA to the Senate under Section 21, Article VII,
and that the Senate extended its concurrence under the same provision, is immaterial. For in either
case, whether under Section 21, Article VII or Section 25, Article XVIII, the fundamental law is
crystalline that the concurrence of the Senate is mandatory to comply with the strict constitutional
requirements.
On the whole, the VFA is an agreement which defines the treatment of United States troops and
personnel visiting the Philippines. It provides for the guidelines to govern such visits of military
personnel, and further defines the rights of the United States and the Philippine government in the
matter of criminal jurisdiction, movement of vessel and aircraft, importation and exportation of
equipment, materials and supplies.

Undoubtedly, Section 25, Article XVIII, which specifically deals with treaties involving foreign
military bases, troops, or facilities, should apply in the instant case. To a certain extent and in a
limited sense, however, the provisions of section 21, Article VII will find applicability with regard to
the issue and for the sole purpose of determining the number of votes required to obtain the valid
concurrence of the Senate, as will be further discussed hereunder.

It is a finely-imbedded principle in statutory construction that a special provision or law prevails over a general
one. Lex specialis derogat generali. Thus, where there is in the same statute a particular enactment and also a
general one which, in its most comprehensive sense, would include what is embraced in the former, the particular
enactment must be operative, and the general enactment must be taken to affect only such cases within its general
language which are not within the provision of the particular enactment.

On temporary or permanent fascilities

Moreover, it is specious to argue that Section 25, Article XVIII is inapplicable to mere transient agreements for
the reason that there is no permanent placing of structure for the establishment of a military base. On this score,
the Constitution makes no distinction between transient and permanent. Certainly, we find nothing in Section 25,
Article XVIII that requires foreign troops or facilities to be stationed or placed permanently in the Philippines.

It is a rudiment in legal hermenuetics that when no distinction is made by law, the Court should not
distinguish- Ubi lex non distinguit nec nos distinguire debemos.

On Sec. 25, being complied with

At this juncture, we shall then resolve the issue of whether or not the requirements of Section 25 were complied
with when the Senate gave its concurrence to the VFA.

Section 25, Article XVIII disallows foreign military bases, troops, or facilities in the country, unless the
following conditions are sufficiently met:
1. it must be under a treaty;
2. the treaty must be duly concurred in by the Senate and, when so required by congress, ratified by
a majority of the votes cast by the people in a national referendum; and
3. recognized as a treaty by the other contracting state.

There is no dispute as to the presence of the first two requisites in the case of the VFA. The concurrence handed
by the Senate through Resolution No. 18 is in accordance with the provisions of the Constitution, whether under
the general requirement in Section 21, Article VII, or the specific mandate mentioned in Section 25, Article
XVIII, the provision in the latter article requiring ratification by a majority of the votes cast in a national
referendum being unnecessary since Congress has not required it.

As to the matter of voting, Section 21, Article VII particularly requires that a treaty or international agreement,
to be valid and effective, must be concurred in by at least two-thirds of all the members of the Senate. On the
other hand, Section 25, Article XVIII simply provides that the treaty be duly concurred in by the Senate.

Applying the foregoing constitutional provisions, a two-thirds vote of all the members of the Senate is clearly
required so that the concurrence contemplated by law may be validly obtained and deemed present. While it is
true that Section 25, Article XVIII requires, among other things, that the treaty-the VFA, in the instant case-be
duly concurred in by the Senate, it is very true however that said provision must be related and viewed in light of
the clear mandate embodied in Section 21, Article VII, which in more specific terms, requires that the
concurrence of a treaty, or international agreement, be made by a two -thirds vote of all the members of the
Senate. Indeed, Section 25, Article XVIII must not be treated in isolation to section 21, Article, VII. Senate
favorably vote to concur with the treaty-the VFA in the instant case.
**** Treaties, International Agreements and Executive Agreements
Having resolved that the first two requisites prescribed in Section 25, Article XVIII are present, we
shall now pass upon and delve on the requirement that the VFA should be recognized as a treaty by the
United States of America.

Petitioners content that the phrase recognized as a treaty, embodied in section 25, Article XVIII, means
that the VFA should have the advice and consent of the United States Senate pursuant to its own
constitutional process, and that it should not be considered merely an executive agreement by the
United States.

In opposition, respondents argue that the letter of United States Ambassador Hubbard stating that the
VFA is binding on the United States Government is conclusive, on the point that the VFA is recognized
as a treaty by the United States of America. According to respondents, the VFA, to be binding, must
only be accepted as a treaty by the United States.

This Court is of the firm view that the phrase recognized as a treaty means that the other
contracting party accepts or acknowledges the agreement as a treaty. To require the other
contracting state, the United States of America in this case, to submit the VFA to the United
States Senate for concurrence pursuant to its Constitution, is to accord strict meaning to the
phrase.

Moreover, it is inconsequential whether the United States treats the VFA only as an executive
agreement because, under international law, an executive agreement is as binding as a treaty. To
be sure, as long as the VFA possesses the elements of an agreement under international law, the
said agreement is to be taken equally as a treaty.

A treaty, as defined by the Vienna Convention on the Law of Treaties, is an international instrument
concluded between States in written form and governed by international law, whether embodied in a
single instrument or in two or more related instruments, and whatever its particular designation. There
are many other terms used for a treaty or international agreement, some of which are: act, protocol,
agreement, compromis d arbitrage, concordat, convention, declaration, exchange of notes, pact, statute,
charter and modus vivendi. All writers, from Hugo Grotius onward, have pointed out that the names or
titles of international agreements included under the general term treaty have little or no legal
significance. Certain terms are useful, but they furnish little more than mere description.

Article 2(2) of the Vienna Convention provides that the provisions of paragraph 1 regarding the use of
terms in the present Convention are without prejudice to the use of those terms, or to the meanings
which may be given to them in the internal law of the State.

Thus, in international law, there is no difference between treaties and executive agreements in
their binding effect upon states concerned, as long as the negotiating functionaries have
remained within their powers. International law continues to make no distinction between
treaties and executive agreements: they are equally binding obligations upon nations.

In our jurisdiction, we have recognized the binding effect of executive agreements even without the
concurrence of the Senate or Congress. In Commissioner of Customs vs. Eastern Sea Trading, we had
occasion to pronounce:
the right of the Executive to enter into binding agreements without the necessity of subsequent
congressional approval has been confirmed by long usage. From the earliest days of our history
we have entered into executive agreements covering such subjects as commercial and consular
relations, most-favored-nation rights, patent rights, trademark and copyright protection, postal
and navigation arrangements and the settlement of claims. The validity of these has never been
seriously questioned by our courts.
Furthermore, the United States Supreme Court has expressly recognized the validity and
constitutionality of executive agreements entered into without Senate approval.
The records reveal that the United States Government, through Ambassador Thomas C.
Hubbard, has stated that the United States government has fully committed to living up to the
terms of the VFA. For as long as the United States of America accepts or acknowledges the VFA
as a treaty, and binds itself further to comply with its obligations under the treaty, there is indeed
marked compliance with the mandate of the Constitution.

Worth stressing too, is that the ratification, by the President, of the VFA and the concurrence of the
Senate should be taken as a clear an unequivocal expression of our nations consent to be bound by
said treaty, with the concomitant duty to uphold the obligations and responsibilities embodied
thereunder.

Ratification is generally held to be an executive act, undertaken by the head of the state or of the
government, as the case may be, through which the formal acceptance of the treaty is
proclaimed. A State may provide in its domestic legislation the process of ratification of a treaty. The
consent of the State to be bound by a treaty is expressed by ratification when: (a) the treaty provides
for such ratification, (b) it is otherwise established that the negotiating States agreed that ratification
should be required, (c) the representative of the State has signed the treaty subject to ratification, or (d)
the intention of the State to sign the treaty subject to ratification appears from the full powers of its
representative, or was expressed during the negotiation.

In our jurisdiction, the power to ratify is vested in the President and not, as commonly believed, in the
legislature. The role of the Senate is limited only to giving or withholding its consent, or concurrence,
to the ratification.

With the ratification of the VFA, which is equivalent to final acceptance, and with the exchange
of notes between the Philippines and the United States of America, it now becomes obligatory
and incumbent on our part, under the principles of international law, to be bound by the terms
of the agreement. Thus, no less than Section 2, Article II of the Constitution, declares that the
Philippines adopts the generally accepted principles of international law as part of the law of the land
and adheres to the policy of peace, equality, justice, freedom, cooperation and amity with all nations.
As a member of the family of nations, the Philippines agrees to be bound by generally accepted rules
for the conduct of its international relations. While the international obligation devolves upon the state
and not upon any particular branch, institution, or individual member of its government, the
Philippines is nonetheless responsible for violations committed by any branch or subdivision of its
government or any official thereof. As an integral part of the community of nations, we are responsible
to assure that our government, Constitution and laws will carry out our international obligation. Hence,
we cannot readily plead the Constitution as a convenient excuse for non-compliance with our
obligations, duties and responsibilities under international law.

Beyond this, Article 13 of the Declaration of Rights and Duties of States adopted by the International
Law Commission in 1949 provides: Every State has the duty to carry out in good faith its obligations
arising from treaties and other sources of international law, and it may not invoke provisions in its
constitution or its laws as an excuse for failure to perform this duty.

Equally important is Article 26 of the convention which provides that Every treaty in force is binding
upon the parties to it and must be performed by them in good faith. This is known as the principle
of pacta sunt servanda which preserves the sanctity of treaties and have been one of the most
fundamental principles of positive international law, supported by the jurisprudence of international
tribunals.
On Grave Abuse of Discretion
In the instant controversy, the President, in effect, is heavily faulted for exercising a power and
performing a task conferred upon him by the Constitution-the power to enter into and ratify
treaties. Through the expediency of Rule 65 of the Rules of Court, petitioners in these consolidated
cases impute grave abuse of discretion on the part of the chief Executive in ratifying the VFA, and
referring the same to the Senate pursuant to the provisions of Section 21, Article VII of the
Constitution.
On this particular matter, grave abuse of discretion implies such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction, or, when the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, and it must be so patent and gross as to
amount to an evasion of positive duty enjoined or to act at all in contemplation of law.

The High Tribunals function, as sanctioned by Article VIII, Section 1, is merely (to) check whether or
not the governmental branch or agency has gone beyond the constitutional limits of its jurisdiction, not
that it erred or has a different view. In the absence of a showing (of) grave abuse of discretion
amounting to lack of jurisdiction, there is no occasion for the Court to exercise its corrective powerIt
has no power to look into what it thinks is apparent error.

As to the power to concur with treaties, the constitution lodges the same with the Senate alone. Thus,
once the Senateperforms that power, or exercises its prerogative within the boundaries prescribed by
the Constitution, the concurrence cannot, in like manner, be viewed to constitute an abuse of power,
much less grave abuse thereof. Corollarily, the Senate, in the exercise of its discretion and acting
within the limits of such power, may not be similarly faulted for having simply performed a task
conferred and sanctioned by no less than the fundamental law.

For the role of the Senate in relation to treaties is essentially legislative in character; the Senate, as an
independent body possessed of its own erudite mind, has the prerogative to either accept or reject the
proposed agreement, and whatever action it takes in the exercise of its wide latitude of discretion,
pertains to the wisdom rather than the legality of the act. In this sense, the Senate partakes a principal,
yet delicate, role in keeping the principles of separation of powers and of checks and balances alive
and vigilantly ensures that these cherished rudiments remain true to their form in a democratic
government such as ours. The Constitution thus animates, through this treaty-concurring power of the
Senate, a healthy system of checks and balances indispensable toward our nations pursuit of political
maturity and growth. True enough, rudimentary is the principle that matters pertaining to the wisdom
of a legislative act are beyond the ambit and province of the courts to inquire.

In fine, absent any clear showing of grave abuse of discretion on the part of respondents, this
Court- as the final arbiter of legal controversies and staunch sentinel of the rights of the people - is
then without power to conduct an incursion and meddle with such affairs purely executive and
legislative in character and nature. For the Constitution no less, maps out the distinct boundaries and
limits the metes and bounds within which each of the three political branches of government may
exercise the powers exclusively and essentially conferred to it by law.

WHEREFORE, in light of the foregoing disquisitions, the instant petitions are hereby DISMISSED.

SO ORDERED.
 ARTHUR D. LIM and PAULINO R. ERSANDO, petitioners,
vs.
HONORABLE EXECUTIVE SECRETARY as alter ego of HER EXCELLENCEY GLORIA
MACAPAGAL-ARROYO, and HONORABLE ANGELO REYES in his capacity as Secretary of
National Defense, respondents.

DE LEON, JR., J.:

FACTS
The entry of American troops into Philippine soil is proximately rooted in the international anti-
terrorism campaign declared by President George W. Bush in reaction to the tragic events that
occurred on September 11, 2001. On that day, three (3) commercial aircrafts were hijacked, flown and
smashed into the twin towers of the World Trade Center in New York City and the Pentagon building in
Washington, D.C. by terrorists with alleged links to the al-Qaeda ("the Base"), a Muslim extremist
organization headed by the infamous Osama bin Laden. Of no comparable historical parallels, these
acts caused billions of dollars worth of destruction of property and incalculable loss of hundreds of
lives.

Beginning January of this year 2002, personnel from the armed forces of the United States of America
started arriving in Mindanao to take part, in conjunction with the Philippine military, in "Balikatan 02-
1." These so-called "Balikatan" exercises are the largest combined training operations involving
Filipino and American troops. In theory, they are a simulation of joint military maneuvers pursuant to
the Mutual Defense Treaty,1 a bilateral defense agreement entered into by the Philippines and the
United States in 1951.

Prior to the year 2002, the last "Balikatan" was held in 1995. This was due to the paucity of any formal
agreement relative to the treatment of United States personnel visiting the Philippines. In the
meantime, the respective governments of the two countries agreed to hold joint exercises on a reduced
scale. The lack of consensus was eventually cured when the two nations concluded the Visiting Forces
Agreement (VFA) in 1999.

On February 1, 2002, petitioners Arthur D. Lim and Paulino P. Ersando filed this petition for
certiorari and prohibition, attacking the constitutionality of the joint exercise. They were joined
subsequently by SANLAKAS and PARTIDO NG MANGGAGAWA, both party-Iist organizations,
who filed a petition-in-intervention on February 11, 2002.

Lim and Ersando filed suit in their capacities as citizens, lawyers and taxpayers. SANLAKAS and
PARTIDO, on the other hand, aver that certain members of their organization are residents of
Zamboanga and Sulu, and hence will be directly affected by the operations being conducted in
Mindanao. They likewise pray for a relaxation on the rules relative to locus standi citing the
unprecedented importance of the issue involved.

On February 71 2002 the Senate conducted a hearing on the "Balikatan" exercise wherein Vice-
President Teofisto T. Guingona, Jr., who is concurrently Secretary of Foreign. Affairs, presented the
Draft Terms of Reference (TOR).3Five days later, he approved the TOR

Contemporaneously, Assistant Secretary for American Affairs Minerva Jean A. Falcon and United
States Charge d' Affaires Robert Fitts signed the Agreed Minutes of the discussion between the Vice-
President and Assistant Secretary Kelly.4
RULING
The holding of "Balikatan 02-1" must be studied in the framework of the treaty antecedents to which
the Philippines bound itself. The first of these is the Mutual Defense Treaty (MDT). The MDT has
been described as the "core" of the defense relationship between the Philippines and its traditional ally,
the United States. Its aim is to enhance the strategic and technological capabilities of our armed forces
through joint training with its American counterparts; the "Balikatan" is the largest such training
exercise directly supporting the MDT's objectives. It is this treaty to which the V FA adverts and the
obligations thereunder which it seeks to reaffirm.

The lapse of the US-Philippine Bases Agreement in 1992 and the decision not to renew it created
a vacuum in US-Philippine defense relations, that is, until it was replaced by the Visiting Forces
Agreement. It should be recalled that, by a vote of eleven to three, this Court upheld the validity of the
VFA. The V FA provides the "regulatory mechanism" by which "United States military and civilian
personnel may visit temporarily in the Philippines in connection with activities approved by the
Philippine Government." It contains provisions relative to entry and departure of American personnel,
driving and vehicle registration, criminal jurisdiction, claims, importation and exportation, movement
of vessels and aircraft, as well as the duration of the agreement and its termination. It is the VFA
which gives continued relevance to the MDT despite the passage of years. Its primary goal is to
facilitate the promotion of optimal cooperation between American and Philippine military forces
in the event of an attack by a common foe.

***** Interpretation of Treaties

The first question that should be addressed is whether "Balikatan 02-1" is covered by the
Visiting Forces Agreement. To resolve this, it is necessary to refer to the V FA itself: Not much help
can be had therefrom, unfortunately, since the terminology employed is itself the source of the
problem. The VFA permits United States personnel to engage, on an impermanent basis, in "activities,"
the exact meaning of which was left undefined. The expression is ambiguous, permitting a wide scope
of undertakings subject only to the approval of the Philippine government. 8 The sole encumbrance
placed on its definition is couched in the negative, in that United States personnel must "abstain from
any activity inconsistent with the spirit of this agreement, and in particular, from any political
activity."9 All other activities, in other words, are fair game.

We are not left completely unaided, however. The Vienna Convention on the Law of Treaties, which
contains provisos governing interpretations of international agreements.

The cardinal rule of interpretation must involve an examination of the text, which is presumed to
verbalize the parties' intentions. The Convention likewise dictates what may be used as aids to deduce
the meaning of terms, which it refers to as the context of the treaty, as well as other elements may be
taken into account alongside the aforesaid context. As explained by a writer on the Convention ,
the Commission's proposals were clearly based on the view that the text of a treaty must be presumed
to be the authentic expression of the intentions of the parties; the Commission accordingly came down
firmly in favour of the view that 'the starting point of interpretation is the elucidation of the meaning of
the text, not an investigation ab initio into the intentions of the parties'.

The Terms of Reference rightly fall within the context of the VFA.

After studied reflection, it appeared farfetched that the ambiguity surrounding the meaning of the word
.'activities" arose from accident. In our view, it was deliberately made that way to give both parties a
certain leeway in negotiation. In this manner, visiting US forces may sojourn in Philippine territory for
purposes other than military. As conceived, the joint exercises may include training on new techniques
of patrol and surveillance to protect the nation's marine resources, sea search-and-rescue operations to
assist vessels in distress, disaster relief operations, civic action projects such as the building of school
houses, medical and humanitarian missions, and the like.
Under these auspices, the VFA gives legitimacy to the current Balikatan exercises. It is only
logical to assume that .'Balikatan 02-1," a "mutual anti- terrorism advising, assisting and training
exercise," falls under the umbrella of sanctioned or allowable activities in the context of the
agreement. Both the history and intent of the Mutual Defense Treaty and the V FA support the
conclusion that combat-related activities -as opposed to combat itself -such as the one subject of
the instant petition, are indeed authorized.

*****On Engagement in Combat

May American troops actually engage in combat in Philippine territory?

The Terms of Reference are explicit enough. Paragraph 8 of section I stipulates that US exercise
participants may not engage in combat "except in self-defense." We wryly note that this sentiment is
admirable in the abstract but difficult in implementation. The target of "Balikatan 02-1 I" the Abu
Sayyaf, cannot reasonably be expected to sit idly while the battle is brought to their very doorstep.
They cannot be expected to pick and choose their targets for they will not have the luxury of doing so.

We state this point if only to signify our awareness that the parties straddle a fine line, observing the
honored legal maxim "Nemo potest facere per alium quod non potest facere per directum." The
indirect violation is actually petitioners' worry, that in reality, "Balikatan 02-1 " is actually a war
principally conducted by the United States government, and that the provision on self-defense
serves only as camouflage to conceal the true nature of the exercise. A clear pronouncement on
this matter thereby becomes crucial.

In our considered opinion, neither the MDT nor the V FA allow foreign troops to engage in an
offensive war on Philippine territory. We bear in mind the salutary proscription stated in the Charter
of the United Nations, to wit:
Article 2
The Organization and its Members, in pursuit of the Purposes stated in Article 1, shall act in
accordance with the following Principles.
xxx xxx xxx xxx
4. All Members shall refrain in their international relations from the threat or use of force
against the territorial integrity or political independence of any state, or in any other manner
inconsistent with the Purposes of the United Nations.
xxx xxx xxx xxx

In the same manner, both the Mutual Defense Treaty and the Visiting Forces Agreement, as in all other
treaties and international agreements to which the Philippines is a party, must be read in the context of
the 1987 Constitution. In particular, the Mutual Defense Treaty was concluded way before the
present Charter, though it nevertheless remains in effect as a valid source of international
obligation. The present Constitution contains key provisions useful in determining the extent to which
foreign military troops are allowed in Philippine territory.

The Constitution also regulates the foreign relations powers of the Chief Executive when it provides
that "no treaty or international agreement shall be valid and effective unless concurred in by at least
two-thirds of all the members of the Senate." Even more pointedly, the Transitory Provisions state:
Sec. 25. After the expiration in 1991 of the Agreement between the Republic of the Philippines
and the United States of America concerning Military Bases, foreign military bases, troops or
facilities shall not be allowed in the Philippines except under a treaty duly concurred in by the
Senate and, when the Congress so requires, ratified by a majority of the votes cast by the
people in a national referendum held for that purpose, and recognized as a treaty by the other
contracting state.
The aforequoted provisions betray a marked antipathy towards foreign military presence in the country,
or of foreign influence in general. Hence, foreign troops are allowed entry into the Philippines only by
way of direct exception. Conflict arises then between the fundamental law and our obligations arising
from international agreements.

From the perspective of public international law, a treaty is favored over municipal law pursuant to the
principle of pacta sunt servanda. Hence, "every treaty in force is binding upon the parties to it and
must be performed by them in good faith." Further, a party to a treaty is not allowed to "invoke the
provisions of its internal law as justification for its failure to perform a treaty."

In Ichong v. Hernandez, we ruled that the provisions of a treaty are always subject to qualification or
amendment by a subsequent law, or that it is subject to the police power of the State. In Gonzales v.
Hechanova,
xxx As regards the question whether an international agreement may be invalidated by our
courts, suffice it to say that the Constitution of the Philippines has clearly settled it in the
affirmative, by providing, in Section 2 of Article VIII thereof, that the Supreme Court may not
be deprived "of its jurisdiction to review, revise, reverse, modify, or affirm on appeal,
certiorari, or writ of error as the law or the rules of court may provide, final judgments and
decrees of inferior courts in -( I) All cases in which the constitutionality or validity of
any treaty, law, ordinance, or executive order or regulation is in question."

In other words, our Constitution authorizes the nullification of a treaty, not only when it
conflicts with the fundamental law, but, also, when it runs counter to an act of Congress.

The foregoing premises leave us no doubt that US forces are prohibited / from engaging in an
offensive war on Philippine territory.

Yet a nagging question remains: are American troops actively engaged in combat alongside Filipino soldiers
under the guise of an alleged training and assistance exercise? Contrary to what petitioners would have us do,
we cannot take judicial notice of the events transpiring down south, as reported from the saturation coverage of
the media. As a rule, we do not take cognizance of newspaper or electronic reports per se, not because of any
issue as to their truth, accuracy, or impartiality, but for the simple reason that facts must be established in
accordance with the rules of evidence. As a result, we cannot accept, in the absence of concrete proof,
petitioners' allegation that the Arroyo government is engaged in "doublespeak" in trying to pass off as a mere
training exercise an offensive effort by foreign troops on native soil. The petitions invite us to speculate
on what is really happening in Mindanao, to issue I make factual findings on matters well beyond our immediate
perception, and this we are understandably loath to do.

It is all too apparent that the determination thereof involves basically a question of fact. On this point, we must
concur with the Solicitor General that the present subject matter is not a fit topic for a special civil action
for certiorari. We have held in too many instances that questions of fact are not entertained in such a remedy. The
sole object of the writ is to correct errors of jurisdiction or grave abuse of discretion: The phrase "grave abuse of
discretion" has a precise meaning in law, denoting abuse of discretion "too patent and gross as to amount to an
evasion of a positive duty, or a virtual refusal to perform the duty enjoined or act in contemplation of law, or
where the power is exercised in an arbitrary and despotic manner by reason of passion and personal hostility." 19

In this connection, it will not be amiss to add that the Supreme Court is not a trier of facts. 20
Under the expanded concept of judicial power under the Constitution, courts are charged with the duty "to
determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on
the part of any branch or instrumentality of the government."21 From the facts obtaining, we find that the holding
of "Balikatan 02-1" joint military exercise has not intruded into that penumbra of error that would otherwise call
for correction on our part. In other words, respondents in the case at bar have not committed grave abuse of
discretion amounting to lack or excess of jurisdiction.

WHEREFORE, the petition and the petition-in-intervention are hereby DISMISSED without prejudice to the
filing of a new petition sufficient in form and substance in the proper Regional Trial Court.

SO ORDERED.
 GR No. 158088 July 6, 2005
Senator Aquilino Pimentel vs. Executive Secretary
PUNO J.:
FACTS
This is a petition for mandamus filed by petitioners to compel the Office of the Executive Secretary and the
Department of Foreign Affairs to transmit the signed copy of the Rome Statute of the International Criminal
Court to the Senate of the Philippines for its concurrence in accordance with Section 21, Article VII of the 1987
Constitution.

The Rome Statute established the International Criminal Court which shall have the power to exercise its
jurisdiction over persons for the most serious crimes of international concern and shall be complementary to the
national criminal jurisdictions. Its jurisdiction covers the crime of genocide, crimes against humanity, war crimes
and the crime of aggression as defined in the Statute. The Philippines signed the Statute on December 28, 2000
through Charge d Affairs Enrique A. Manalo of the Philippine Mission to the United Nations. Its
provisions, however, require that it be subject to ratification, acceptance or approval of the signatory
states.

Petitioners filed the instant petition to compel the respondents the Office of the Executive Secretary and the
Department of Foreign Affairs to transmit the signed text of the treaty to the Senate of the Philippines for
ratification.

It is the theory of the petitioners that ratification of a treaty, under both domestic law and international law, is a
function of the Senate. Hence, it is the duty of the executive department to transmit the signed copy of the Rome
Statute to the Senate to allow it to exercise its discretion with respect to ratification of treaties. Moreover,
petitioners submit that the Philippines has a ministerial duty to ratify the Rome Statute under treaty law and
customary international law. Petitioners invoke the Vienna Convention on the Law of Treaties enjoining the states
to refrain from acts which would defeat the object and purpose of a treaty when they have signed the treaty prior
to ratification unless they have made their intention clear not to become parties to the treaty.

ISSUE
The core issue in this petition for mandamus is whether the Executive Secretary and the Department of Foreign
Affairs have a ministerial duty to transmit to the Senate the copy of the Rome Statute signed by a member of the
Philippine Mission to the United Nations even without the signature of the President.

RULING
Petitioners arguments equate the signing of the treaty by the Philippine representative with
ratification.
Petitioners submission that the Philippines is bound under treaty law and international law
to ratify the treaty which it has signed is without basis.

We rule in the negative.

The President is vested with the authority to deal with foreign states and governments, extend or
withhold recognition, maintain diplomatic relations, enter into treaties, and otherwise transact the
business of foreign relations. In the realm of treaty-making, the President has the sole authority to
negotiate with other states.

Nonetheless, while the President has the sole authority to negotiate and enter into treaties, the
Constitution provides a limitation to his power by requiring the concurrence of 2/3 of all the
members of the Senate for the validity of the treaty entered into by him.

The participation of the legislative branch in the treaty-making process was deemed essential to
provide a check on the executive in the field of foreign relations.

In filing this petition, the petitioners interpret Section 21, Article VII of the 1987 Constitution to mean
that the power to ratify treaties belongs to the Senate.

We disagree.
Justice Isagani Cruz, in his book on International Law, describes the treaty-making process in
this wise:
The usual steps in the treaty-making process are: negotiation, signature, ratification, and
exchange of the instruments of ratification. The treaty may then be submitted for
registration and publication under the U.N. Charter, although this step is not essential to
the validity of the agreement as between the parties.

Negotiation may be undertaken directly by the head of state but he now usually assigns this
task to his authorized representatives. These representatives are provided with credentials
known as full powers, which they exhibit to the other negotiators at the start of the formal
discussions. It is standard practice for one of the parties to submit a draft of the proposed treaty
which, together with the counter-proposals, becomes the basis of the subsequent negotiations.
The negotiations may be brief or protracted, depending on the issues involved, and may even
collapse in case the parties are unable to come to an agreement on the points under
consideration.

If and when the negotiators finally decide on the terms of the treaty, the same is opened
for signature. This step is primarily intended as a means of authenticating the instrument and
for the purpose of symbolizing the good faith of the parties; but, significantly, it does not
indicate the final consent of the state in cases where ratification of the treaty is required. The
document is ordinarily signed in accordance with the alternat, that is, each of the several
negotiators is allowed to sign first on the copy which he will bring home to his own state.

Ratification, which is the next step, is the formal act by which a state confirms and accepts the
provisions of a treaty concluded by its representatives. The purpose of ratification is to enable
the contracting states to examine the treaty more closely and to give them an opportunity to
refuse to be bound by it should they find it inimical to their interests. It is for this reason that
most treaties are made subject to the scrutiny and consent of a department of the government
other than that which negotiated them.

The last step in the treaty-making process is the exchange of the instruments of ratification,
which usually also signifies the effectivity of the treaty unless a different date has been agreed
upon by the parties. Where ratification is dispensed with and no effectivity clause is embodied
in the treaty, the instrument is deemed effective upon its signature.

Petitioners arguments equate the signing of the treaty by the Philippine representative with
ratification. It should be underscored that the signing of the treaty and the ratification are two
separate and distinct steps in the treaty-making process. As earlier discussed, the signature is
primarily intended as a means of authenticating the instrument and as a symbol of the good faith of the
parties. It is usually performed by the states authorized representative in the diplomatic mission.
Ratification, on the other hand, is the formal act by which a state confirms and accepts the provisions
of a treaty concluded by its representative. It is generally held to be an executive act, undertaken by the
head of the state or of the government.

Thus, Executive Order No. 459 issued by President Fidel V. Ramos on November 25, 1997 provides
the guidelines in the negotiation of international agreements and its ratification. It mandates that after
the treaty has been signed by the Philippine representative, the same shall be transmitted to the
Department of Foreign Affairs. The Department of Foreign Affairs shall then prepare the ratification
papers and forward the signed copy of the treaty to the President for ratification. After the President
has ratified the treaty, the Department of Foreign Affairs shall submit the same to the Senate for
concurrence. Upon receipt of the concurrence of the Senate, the Department of Foreign Affairs shall
comply with the provisions of the treaty to render it effective.
Petitioners submission that the Philippines is bound under treaty law and international law to
ratify the treaty which it has signed is without basis. The signature does not signify the final
consent of the state to the treaty. It is the ratification that binds the state to the provisions thereof. In
fact, the Rome Statute itself requires that the signature of the representatives of the states be subject to
ratification, acceptance or approval of the signatory states.

Ratification is the act by which the provisions of a treaty are formally confirmed and approved by a
State. By ratifying a treaty signed in its behalf, a state expresses its willingness to be bound by the
provisions of such treaty. After the treaty is signed by the states representative, the President,
being accountable to the people, is burdened with the responsibility and the duty to carefully study
the contents of the treaty and ensure that they are not inimical to the interest of the state and its
people. Thus, the President has the discretion even after the signing of the treaty by the Philippine
representative whether or not to ratify the same. The Vienna Convention on the Law of Treaties does
not contemplate to defeat or even restrain this power of the head of states. If that were so, the
requirement of ratification of treaties would be pointless and futile. It has been held that a state has no
legal or even moral duty to ratify a treaty which has been signed by its plenipotentiaries. There is no
legal obligation to ratify a treaty, but it goes without saying that the refusal must be based on
substantial grounds and not on superficial or whimsical reasons. Otherwise, the other state would be
justified in taking offense.

It should be emphasized that under our Constitution, the power to ratify is vested in the President,
subject to the concurrence of the Senate. The role of the Senate, however, is limited only to giving or
withholding its consent, or concurrence, to the ratification. Hence, it is within the authority of the
President to refuse to submit a treaty to the Senate or, having secured its consent for its
ratification, refuse to ratify it. Although the refusal of a state to ratify a treaty which has been signed
in its behalf is a serious step that should not be taken lightly, such decision is within the competence
of the President alone, which cannot be encroached by this Court via a writ of mandamus. This
Court has no jurisdiction over actions seeking to enjoin the President in the performance of his official
duties. The Court, therefore, cannot issue the writ of mandamus prayed for by the petitioners as it is
beyond its jurisdiction to compel the executive branch of the government to transmit the signed text of
Rome Statute to the Senate.

IN VIEW WHEREOF, the petition is DISMISSED.

SO ORDERED.
 GR No. 1060664 October 13, 2005
SPOUSES RENATO CONSTANTINO JR. and LOURDES CONSTANTINO and Their Minor Children RENATO,
REDENTOR, ANNA MARIKA LISSA, NINA ELISA, and ANNA KARMINA; FREEDOM FROM DEBT
COALITION; and FILOMENO STA. ANA III v. The Hon. JOSE B. CUISIA, in His Capacity as Governor of the
Central Bank; The Hon. RAMON DEL ROSARIO, in His Capacity as Secretary of Finance; The Hon. EMMANUEL
V. PELAEZ, in His Capacity as Philippine Debt Negotiating Panel Chairman; and the NATIONAL TREASURER.
TINGA, J.:
FACTS
The quagmire that is the foreign debt problem has especially confounded developing nations around the world for decades. It
has defied easy solutions acceptable both to debtor countries and their creditors. It has also emerged as cause celebre for
various political movements and grassroots activists and the wellspring of much scholarly thought and debate.

The present petition illustrates some of the ideological and functional differences between experts on how to achieve debt
relief. However, this being a court of law, not an academic forum or a convention on development economics, our resolution
has to hinge on the presented legal issues which center on the appreciation of the constitutional provision that empowers the
President to contract and guarantee foreign loans. The ultimate choice is between a restrictive reading of the constitutional
provision and an alimentative application thereof consistent with time-honored principles on executive power and the alter
ego doctrine.

Parties and Facts

The petition was filed on 17 July 1992 by petitioners spouses Renato Constantino, Jr. and Lourdes Constantino and their
minor children, and the Freedom from Debt Coalition, a non-stock, non-profit, non-government organization that advocates a
pro-people and just Philippine debt policy. Named respondents were the then Governor of the Bangko Sentral ng Pilipinas, the
Secretary of Finance, the National Treasurer, and the Philippine Debt Negotiation Chairman Emmanuel V. Pelaez. All
respondents were members of the Philippine panel tasked to negotiate with the countrys foreign creditors pursuant to the
Financing Program.

The Philippine Comprehensive Financing Program for 1992 (Financing Program or Program) was the
culmination of efforts that began during the term of former President Corazon Aquino to manage the countrys
external debt problem through a negotiation-oriented debt strategy involving cooperation and negotiation with
foreign creditors. Pursuant to this strategy, the Aquino government entered into three restructuring
agreements with representatives of foreign creditor governments during the period of 1986 to 1991. During
the same period, three similarly-oriented restructuring agreements were executed with commercial bank
creditors.

In 1992, the Philippine Debt Negotiating Team, chaired by respondent Pelaez, negotiated an agreement with the
countrys Bank Advisory Committee, representing all foreign commercial bank creditors, on the Financing
Program which respondents characterized as a multi-option financing package. The Program was scheduled to be
executed on 24 July 1992 by respondents in behalf of the Republic. Nonetheless, petitioners alleged that even
prior to the execution of the Program respondents had already implemented its buyback component when on 15
May 1992, the Philippines bought back P1.26 billion of external debts pursuant to the Program.

The petition sought to enjoin the ratification of the Program, but the Court did not issue any injunctive
relief. Hence, it came to pass that the Program was signed in London as scheduled. The petition still has to
be resolved though as petitioners seek the annulment of any and all acts done by respondents, their subordinates
and any other public officer pursuant to the agreement and program in question. Even after the signing of the
Program, respondents themselves acknowledged that the remaining principal objective of the petition is to set
aside respondents actions.

Petitioners characterize the Financing Program as a package offered to the countrys foreign creditors consisting
of two debt-relief options.
1. The first option was a cash buyback of portions of the Philippine foreign debt at a discount.
2. The second option allowed creditors to convert existing Philippine debt instruments into any of three
kinds of bonds/securities:
a. new money bonds with a five-year grace period and 17 years final maturity, the purchase of which
would allow the creditors to convert their eligible debt papers into bearer bonds with the same
terms;
b. interest-reduction bonds with a maturity of 25 years; and
c. principal-collateralized interest-reduction bonds with a maturity of 25 years.

On the other hand, according to respondents, the Financing Program would cover about U.S. $5.3 billion of foreign
commercial debts and it was expected to deal comprehensively with the commercial bank debt problem of the country and
pave the way for the countrys access to capital markets. They add that the Program carried three basic options from which
foreign bank lenders could choose, namely: to lend money, to exchange existing restructured Philippine debts with an interest
reduction bond; or to exchange the same Philippine debts with a principal collateralized interest reduction bond.
RULING

The allegation that respondents waived the Philippines right to repudiate void and fraudulently
contracted loans by executing the debt-relief agreements is, on many levels, not justiciable.

In the first place, records do not show whether the so-called behest loans or other allegedly void or
fraudulently contracted loans were subject of the debt-relief contracts entered into under the Financing
Program.

Fraudulently contracted loans are voidable and, as such, valid and enforceable until annulled by the
courts. On the other hand, void contracts that have already been fulfilled must be declared void in
view of the maxim that no one is allowed to take the law in his own hands. Petitioners theory depends
on a prior annulment or declaration of nullity of the pre-existing loans, which thus far have not been
submitted to this Court. Additionally, void contracts are unratifiable by their very nature; they are null
and void ab initio. Consequently, from the viewpoint of civil law, what petitioners present as the
Republics right to repudiate is yet a contingent right, one which cannot be allowed as an
anticipatory basis for annulling the debt-relief contracts. Petitioners contention that the debt-relief
agreements are tantamount to waivers of the Republics right to repudiate so-called behest loans is
without legal foundation.

It may not be amiss to recognize that there are many advocates of the position that the Republic should
renege on obligations that are considered as illegitimate. However, should the executive branch
unilaterally, and possibly even without prior court determination of the validity or invalidity of these
contracts, repudiate or otherwise declare to the international community its resolve not to recognize a
certain set of illegitimate loans, adverse repercussions would come into play. Dr. Felipe Medalla,
former Director General of the National Economic Development Authority, has warned, thus:

One way to reduce debt service is to repudiate debts, totally or selectively. Taken to its limit,
however, such a strategy would put the Philippines at such odds with too many enemies.
Foreign commercial banks by themselves and without the cooperation of creditor
governments, especially the United States, may not be in a position to inflict much damage, but
concerted sanctions from commercial banks, multilateral financial institutions and creditor
governments would affect not only our sources of credit but also our access to markets for our
exports and the level of development assistance. . . . The country might face concerted
sanctions even if debts were repudiated only selectively.

The point that must be stressed is that repudiation is not an attractive alternative if net payments
to creditors in the short and medium-run can be reduced through an agreement (as opposed to a
unilaterally set ceiling on debt service payments) which provides for both rescheduling of
principal and capitalization of interest, or its equivalent in new loans, which would make it easier
for the country to pay interest.

Sovereign default is not new to the Philippine setting. In October 1983, the Philippines declared a
moratorium on principal payments on its external debts that eventually lasted four years, that virtually
closed the countrys access to new foreign money and drove investors to leave the Philippine market,
resulting in some devastating consequences. It would appear then that this beguilingly attractive and
dangerously simplistic solution deserves the utmost circumspect cogitation before it is resorted to.

In any event, the discretion on the matter lies not with the courts but with the executive. Thus,
the Program was conceptualized as an offshoot of the decision made by then President Aquino
that the Philippines should recognize its sovereign debts despite the controversy that engulfed
many debts incurred during the Marcos era. It is a scheme whereby the Philippines restructured
its debts following a negotiated approach instead of a default approach to manage the bleak
Philippine debt situation.
As a final point, petitioners have no real basis to fret over a possible waiver of the right to repudiate
void contracts. Even assuming that spurious loans had become the subject of debt-relief contracts,
respondents unequivocally assert that the Republic did not waive any right to repudiate void or
fraudulently contracted loans, it having incorporated a no-waiver clause in the agreements.

Delegation of Power
Petitioners stress that unlike other powers which may be validly delegated by the President, the power
to incur foreign debts is expressly reserved by the Constitution in the person of the President.
They argue that the gravity by which the exercise of the power will affect the Filipino nation requires
that the President alone must exercise this power. They submit that the requirement of prior
concurrence of an entity specifically named by the Constitution the Monetary Board reinforces
the submission that not respondents but the President alone and personally can validly bind the
country.

Petitioners position is negated both by explicit constitutional and legal imprimaturs, as well as the
doctrine of qualified political agency.

The evident exigency of having the Secretary of Finance implement the decision of the President to
execute the debt-relief contracts is made manifest by the fact that the process of establishing and
executing a strategy for managing the governments debt is deep within the realm of the expertise of
the Department of Finance, primed as it is to raise the required amount of funding, achieve its risk and
cost objectives, and meet any other sovereign debt management goals.

If, as petitioners would have it, the President were to personally exercise every aspect of the foreign
borrowing power, he/she would have to pause from running the country long enough to focus on a
welter of time-consuming detailed activities, the propriety of incurring/guaranteeing loans, studying
and choosing among the many methods that may be taken toward this end, meeting countless times
with creditor representatives to negotiate, obtaining the concurrence of the Monetary Board, explaining
and defending the negotiated deal to the public, and more often than not, flying to the agreed place of
execution to sign the documents. This sort of constitutional interpretation would negate the very
existence of cabinet positions and the respective expertise which the holders thereof are accorded and
would unduly hamper the Presidents effectivity in running the government.

Necessity thus gave birth to the doctrine of qualified political agency, later adopted in Villena v.
Secretary of the Interior from American jurisprudence, viz:

The heads of the executive departments occupy political positions and hold office in an
advisory capacity, and, in the language of Thomas Jefferson, "should be of the President's
bosom confidence", and, in the language of Attorney-General Cushing, "are subject to the
direction of the President." Without minimizing the importance of the heads of the various
departments, their personality is in reality but the projection of that of the President. Stated
otherwise, and as forcibly characterized by Chief Justice Taft of the Supreme Court of the
United States, "each head of a department is, and must be, the President's alter ego in the
matters of that department where the President is required by law to exercise authority"
Nevertheless, there are powers vested in the President by the Constitution which may not be
delegated to or exercised by an agent or alter ego of the President. Justice Laurel, in
his ponencia in Villena, makes this clear:

Withal, at first blush, the argument of ratification may seem plausible under the circumstances,
it should be observed that there are certain acts which, by their very nature, cannot be validated
by subsequent approval or ratification by the President. There are certain constitutional
powers and prerogatives of the Chief Executive of the Nation which must be exercised by him
in person and no amount of approval or ratification will validate the exercise of any of those
powers by any other person. Such, for instance, in his power to suspend the writ of habeas
corpus and proclaim martial law and the exercise by him of the benign prerogative of mercy.

We cannot conclude that the power of the President to contract or guarantee foreign debts falls within
the same exceptional class. Indubitably, the decision to contract or guarantee foreign debts is of vital
public interest, but only akin to any contractual obligation undertaken by the sovereign, which arises
not from any extraordinary incident, but from the established functions of governance.

Another important qualification must be made. The Secretary of Finance or any designated alter ego of
the President is bound to secure the latters prior consent to or subsequent ratification of his acts. In the
matter of contracting or guaranteeing foreign loans, the repudiation by the President of the very acts
performed in this regard by the alter ego will definitely have binding effect. Had petitioners herein
succeeded in demonstrating that the President actually withheld approval and/or repudiated the
Financing Program, there could be a cause of action to nullify the acts of respondents. Notably though,
petitioners do not assert that respondents pursued the Program without prior authorization of the
President or that the terms of the contract were agreed upon without the Presidents
authorization. Congruent with the avowed preference of then President Aquino to honor and restructure
existing foreign debts, the lack of showing that she countermanded the acts of respondents leads us to
conclude that said acts carried presidential approval.

The presidential prerogative may be exercised by the Presidents alter ego, who in this case is the
Secretary of Finance.

It bears emphasis that apart from the Constitution, there is also a relevant statute, R.A. No. 245, that
establishes the parameters by which the alter ego may act in behalf of the President with respect to the
borrowing power. This law expressly provides that the Secretary of Finance may enter into foreign
borrowing contracts. This law neither amends nor goes contrary to the Constitution but merely
implements the subject provision in a manner consistent with the structure of the Executive
Department and the alter ego doctine. In this regard, respondents have declared that they have
followed the restrictions provided under R.A. No. 245,[63] which include the requisite presidential
authorization and which, in the absence of proof and even allegation to the contrary, should be
regarded in a fashion congruent with the presumption of regularity bestowed on acts done by public
officials.

Moreover, in praying that the acts of the respondents, especially that of the Secretary of Finance, be
nullified as being in violation of a restrictive constitutional interpretation, petitioners in effect would
have this Court declare R.A. No. 245 unconstitutional. We will not strike down a law or provisions
thereof without so much as a direct attack thereon when simple and logical statutory construction
would suffice.
Conclusion

The raison d etre of the Financing Program is to manage debts incurred by the Philippines in a manner
that will lessen the burden on the Filipino taxpayersthus the term debt-relief agreements. The measures
objected to by petitioners were not aimed at incurring more debts but at terminating pre-existing debts
and were backed by the know-how of the countrys economic managers as affirmed by third party
empirical analysis.

That the means employed to achieve the goal of debt-relief do not sit well with petitioners is beyond
the power of this Court to remedy. The exercise of the power of judicial review is merely to checknot
supplantthe Executive, or to simply ascertain whether he has gone beyond the constitutional limits of
his jurisdiction but not to exercise the power vested in him or to determine the wisdom of his act. [78] In
cases where the main purpose is to nullify governmental acts whether as unconstitutional or done with
grave abuse of discretion, there is a strong presumption in favor of the validity of the assailed acts. The
heavy onus is in on petitioners to overcome the presumption of regularity.

We find that petitioners have not sufficiently established any basis for the Court to declare the acts of
respondents as unconstitutional.

WHEREFORE the petition is hereby DISMISSED. No costs.

SO ORDERED.
 G.R. No. 167919 February 14, 2007
PLARIDEL M. ABAYA, COMMODORE PLARIDEL C. GARCIA (retired) and PMA 59 FOUNDATION, INC., rep.
by its President, COMMODORE CARLOS L. AGUSTIN (retired), Petitioners,
vs.
HON. SECRETARY HERMOGENES E. EBDANE, JR., in his capacity as Secretary of the DEPARTMENT OF
PUBLIC WORKS and HIGHWAYS, HON. SECRETARY EMILIA T. BONCODIN, in her capacity as Secretary of the
DEPARTMENT OF BUDGET and MANAGEMENT, HON. SECRETARY CESAR V. PURISIMA, in his capacity as
Secretary of the DEPARTMENT OF FINANCE, HON. TREASURER NORMA L. LASALA, in her capacity as
Treasurer of the Bureau of Treasury, and CHINA ROAD and BRIDGE CORPORATION, Respondents.
CALLEJO, SR., J.:
FACTS

Contract Package No. I (CP I): improvement/rehabilitation of the San Andres (Codon)-Virac-Jct. Bago-Viga road,
with the length of 79.818 kilometers, in the island province of Catanduanes.
JBIC: Japan Bank for International Cooperation

Based on the Exchange of Notes dated December 27, 1999,1 the Government of Japan and the Government of the Philippines,
through their respective representatives, namely, Mr. Yoshihisa Ara, Ambassador Extraordinary and Plenipotentiary of Japan
to the Republic of the Philippines, and then Secretary of Foreign Affairs Domingo L. Siazon, have reached an understanding
concerning Japanese loans to be extended to the Philippines. These loans were aimed at promoting our countrys economic
stabilization and development efforts.

The Exchange of Notes consisted of two documents:

1. a Letter from the Government of Japan, signed by Ambassador Ara, addressed to then Secretary of Foreign Affairs
Siazon, confirming the understanding reached between the two governments concerning the loans to be extended by
the Government of Japan to the Philippines; and
2. a document denominated as Records of Discussion where the salient terms of the loans as set forth by the
Government of Japan, through the Japanese delegation, were reiterated and the said terms were accepted by the
Philippine delegation.

Both Ambassador Ara and then Secretary Siazon signed the Records of Discussion as representatives of the Government of
Japan and Philippine Government, respectively.The Exchange of Notes provided that the loans to be extended by the
Government of Japan to the Philippines consisted of two loans: Loan I (Y79,861,000,000) and Loan II. The Exchange of
Notes stated in part:

Under the terms and conditions of Loan Agreement, JBIC agreed to lend the Philippine Government an amount not
Y 15,384,000,000 as principal for the implementation of the Arterial Road Links Development Project (Phase IV) on the
terms and conditions set forth in the Loan Agreement and in accordance with the relevant laws and regulations of Japan. 7 The
said amount shall be used for the purchase of eligible goods and services necessary for the implementation of the above-
mentioned project from suppliers, contractors or consultants. This road section, in turn, was divided into four contract
packages (CP):
CP I: San Andres (Codon)-Virac-Jct. Bato- Viga Road - 79.818 kms
CP II: Viga-Bagamanoc Road - 10.40 kms.
CP III: Bagamanoc-Pandan Road - 47.50 kms.
CP IV: Pandan-Caramoran-Codon Road - 66.40 kms.

Subsequently, the DPWH, as the government agency tasked to implement the project, caused the publication of the "Invitation
to Prequalify and to Bid" for the implementation of the CP I project in two leading national newspapers, namely, the Manila
Times and Manila Standard.

A total of twenty-three (23) foreign and local contractors responded to the invitation by submitting their accomplished
prequalification documents on January 23, 2003. In accordance with the established prequalification criteria, eight
contractors were evaluated or considered eligible to bid as concurred by the JBIC. One of them, however, withdrew; thus,
only seven contractors submitted their bid proposals.

The three lowest bidders are: 1. China Road And Bridge Corporation, 2. Cavite Ideal International Construction Development
Corporation and 3. Italian Thai Development Public Company Ltd.

The Bids and Awards Committee (BAC) of the DPWH, with the approval of then Acting Secretary Soriquez, issued the
assailed Resolution No. PJHL-A-04-012 dated May 7, 2004 recommending the award in favor of private respondent China
Road & Bridge Corporation of the contract for the implementation of civil works for CP I, San Andres (Codon) Virac Jct.
Bato Viga Road (Catanduanes Circumferential Road Improvement Project) of the Arterial Roads Links Development
Project, Phase IV. A Contract of Agreement was entered into by and between the DPWH and private respondent China Road
& Bridge Corporation for the implementation of the CP I project.

The petitioners mainly seek to nullify DPWH Resolution No. PJHL-A-04-012 dated May 7, 2004, which recommended the
award to private respondent China Road & Bridge Corporation of the contract for the implementation of the civil works of
CP I. They also seek to annul the contract of agreement subsequently entered into by and between the DPWH and private
respondent China Road & Bridge Corporation pursuant to the said resolution.
ISSUE
WON the Loan Agreement is an executive agreement (YES)

THE CASE
Petitioners claim that the award of the contract to private respondent China Road & Bridge
Corporation violates RA 9184 (Government Procurement Reform Act). Under RA 9184, all bids or
awards should not exceed the ceilings or upper limits; otherwise, the contract is deemed void and
inexistent.

Resolution No. PJHL-A-04-012 was allegedly issued with grave abuse of discretion because it
recommended the award of the contract to private respondent China Road & Bridge Corporation
whose bid was more than P200 million overpriced based on the ABC. As such, the award is allegedly
illegal and unconscionable. Since the bid of private respondent China Road & Bridge Corporation
exceeded the ABC for the CP I project, it should have been allegedly disqualified from the bidding
process and should not, by law, have been awarded the said contract.

It is the contention of the petitioners that RA 9184 is applicable to both local- and foreign-funded
procurement contracts.

The petitioners insist that Loan Agreement No. PH-P204 between the JBIC and the Philippine
Government is neither a treaty, an international nor an executive agreement that would bar the
application of RA 9184. They point out that to be considered a treaty, an international or an executive
agreement, the parties must be two sovereigns or States whereas in the case of Loan Agreement No.
PH-P204, the parties are the Philippine Government and the JBIC, a banking agency of Japan, which
has a separate juridical personality from the Japanese Government.

The public respondents characterize foreign loan agreements, including Loan Agreement No.
PH-P204, as executive agreements and, as such, should be observed pursuant to the fundamental
principle in international law of pacta sunt servanda.33 They cite Section 20 of Article VII of the
Constitution as giving the President the authority to contract foreign loans:
SEC. 20. The President may contract or guarantee foreign loans on behalf of the Republic of
the Philippines with the prior concurrence of the Monetary Board, and subject to such
limitations as may be provided by law. The Monetary Board shall, within thirty days from the
end of every quarter of the calendar year, submit to the Congress a complete report of its
decisions on applications for loans to be contracted or guaranteed by the Government or
Government-owned and Controlled Corporations which would have the effect of increasing
the foreign debt, and containing other matters as may be provided by law.

The Constitution, the public respondents emphasize, recognizes the enforceability of executive
agreements in the same way that it recognizes generally accepted principles of international law as
forming part of the law of the land.

RULING

EO 40, not RA 9184, is applicable to the procurement process undertaken for the CP I project. RA 9184 cannot
be given retroactive application. It is not disputed that with respect to the CP I project, the Invitation to
Prequalify and to Bid for its implementation was published in two leading national newspapers, namely, the
Manila Times and Manila Standard on November 22, 29 and December 5, 2002. At the time, the law in effect
was EO 40. On the other hand, RA 9184 took effect two months later or on January 26, 2003. Further, its full
implementation was even delayed as IRR-A was only approved by President Arroyo on September 18, 2003 and
subsequently published on September 23, 2003 in the Manila Times and Malaya newspapers. The provisions of
EO 40 apply to the procurement process pertaining to the CP I project as it is explicitly provided therein.

RA 9184 cannot be applied retroactively to govern the procurement process relative to the CP I project because it
is well settled that a law or regulation has no retroactive application unless it expressly provides for retroactivity.
Under EO 40, the award of the contract to private respondent China Road & Bridge Corporation is valid
The petitioners, in order to place the procurement process undertaken for the CP I project
within the ambit of RA 9184, vigorously assert that Loan Agreement No. PH-P204 is neither a
treaty, an international agreement nor an executive agreement. They cite Executive Order No.
459 dated November 25, 1997 where the three agreements are defined in this wise:
a. International agreement shall refer to a contract or understanding, regardless of
nomenclature, entered into between the Philippines and another government in written form
and governed by international law, whether embodied in a single instrument or in two or more
related instruments.
b. Treaties international agreements entered into by the Philippines which require legislative
concurrence after executive ratification. This term may include compacts like conventions,
declarations, covenants and acts.
c. Executive agreements similar to treaties except that they do not require legislative
concurrence.

The petitioners mainly argue that Loan Agreement No. PH-P204 does not fall under any of the
three categories because to be any of the three, an agreement had to be one where the parties are
the Philippines as a State and another State. The JBIC, the petitioners maintain, is a Japanese
banking agency, which presumably has a separate juridical personality from the Japanese
Government.

The petitioners arguments fail to persuade.

The Court holds that Loan Agreement No. PH-P204 taken in conjunction with the Exchange of
Notes dated December 27, 1999 between the Japanese Government and the Philippine
Government is an executive agreement.

To recall, Loan Agreement No. PH-P204 was executed by and between the JBIC and the Philippine
Government pursuant to the Exchange of Notes executed by and between Mr. Yoshihisa Ara,
Ambassador Extraordinary and Plenipotentiary of Japan to the Philippines, and then Foreign Affairs
Secretary Siazon, in behalf of their respective governments. The Exchange of Notes expressed that the
two governments have reached an understanding concerning Japanese loans to be extended to the
Philippines and that these loans were aimed at promoting our countrys economic stabilization and
development efforts.

Loan Agreement No. PH-P204 was subsequently executed and it declared that it was so entered by the
parties "in the light of the contents of the Exchange of Notes between the Government of Japan and the
Government of the Republic of the Philippines dated December 27, 1999, concerning Japanese loans
to be extended with a view to promoting the economic stabilization and development efforts of the
Republic of the Philippines." Under the circumstances, the JBIC may well be considered an adjunct
of the Japanese Government. Further, Loan Agreement No. PH-P204 is indubitably an integral
part of the Exchange of Notes. It forms part of the Exchange of Notes such that it cannot be
properly taken independent thereof.

In this connection, it is well to understand the definition of an "exchange of notes" under

international law. The term is defined in the United Nations Treaty Collection in this wise:
An "exchange of notes" is a record of a routine agreement that has many similarities with
the private law contract. The agreement consists of the exchange of two documents, each of
the parties being in the possession of the one signed by the representative of the other.
Under the usual procedure, the accepting State repeats the text of the offering State to
record its assent. The signatories of the letters may be government Ministers, diplomats or
departmental heads. The technique of exchange of notes is frequently resorted to, either
because of its speedy procedure, or, sometimes, to avoid the process of legislative approval.
It is stated that "treaties, agreements, conventions, charters, protocols, declarations, memoranda
of understanding, modus vivendi and exchange of notes" all refer to "international instruments
binding at international law." It is further explained that-
Although these instruments differ from each other by title, they all have common features and
international law has applied basically the same rules to all these instruments. These rules are
the result of long practice among the States, which have accepted them as binding norms in
their mutual relations. Therefore, they are regarded as international customary law. Since
there was a general desire to codify these customary rules, two international conventions were
negotiated. The 1969 Vienna Convention on the Law of Treaties ("1969 Vienna Convention"),
which entered into force on 27 January 1980, contains rules for treaties concluded between
States. The 1986 Vienna Convention on the Law of Treaties between States and International
Organizations ("1986 Vienna Convention"), which has still not entered into force, added rules
for treaties with international organizations as parties. Both the 1969 Vienna Convention and
the 1986 Vienna Convention do not distinguish between the different designations of these
instruments. Instead, their rules apply to all of those instruments as long as they meet the
common requirements.

Significantly, an exchange of notes is considered a form of an executive agreement, which

becomes binding through executive action without the need of a vote by the Senate or Congress.
The following disquisition by Francis B. Sayre, former United States High Commissioner to the
Philippines, entitled "The Constitutionality of Trade Agreement Acts," quoted in Commissioner of
Customs v. Eastern Sea Trading, is apropos:
Agreements concluded by the President which fall short of treaties are commonly referred to
as executive agreements and are no less common in our scheme of government than are the
more formal instruments treaties and conventions. They sometimes take the form of
exchange of notes and at other times that of more formal documents denominated
"agreements" or "protocols". The point where ordinary correspondence between this and
other governments ends and agreements whether denominated executive agreements or
exchange of notes or otherwise begin, may sometimes be difficult of ready ascertainment. It
would be useless to undertake to discuss here the large variety of executive agreements as
such, concluded from time to time. Hundreds of executive agreements, other than those
entered into under the trade-agreements act, have been negotiated with foreign governments. x
x x70

Under the fundamental principle of international law of pacta sunt servanda, which is, in fact,
embodied in Section 4 of RA 9184 as it provides that "any treaty or international or executive
agreement affecting the subject matter of this Act to which the Philippine government is a signatory
shall be observed," the DPWH, as the executing agency of the projects financed by Loan Agreement
No. PH-P204, rightfully awarded the contract for the implementation of civil works for the CP I project
to private respondent China Road & Bridge Corporation.

WHEREFORE, premises considered, the petition is DISMISSED.

SO ORDERED.
 GR No. 159618 February 1, 2011
Bayan Muna, as represented by Rep. Satur Ocampo, Rep. Crispin Beltran and Rep. Liza Maza vs. Alberto
Romulo, in his capacity as Executive Secretary, and Blas F. Ople, in his capacity as Secretary of Foreign
Affairs
VELASCO, JR., J.:
FACTS

Rome Statute of the International Criminal Court

Having a key determinative bearing on this case is the Rome Statute establishing the International Criminal Court
(ICC) with the power to exercise its jurisdiction over persons for the most serious crimes of international
concern and shall be complementary to the national criminal jurisdictions. The serious crimes adverted to
cover those considered grave under international law, such as genocide, crimes against humanity, war crimes, and
crimes of aggression.

On December 28, 2000, the RP, through Charge dAffaires Enrique A. Manalo, signed the Rome Statute which, by
its terms, is subject to ratification, acceptance or approval by the signatory states. As of the filing of the instant
petition, only 92 out of the 139 signatory countries appear to have completed the ratification, approval and
concurrence process. The Philippines is not among the 92.

RP-US Non-Surrender Agreement

On May 9, 2003, then Ambassador Francis J. Ricciardone sent US Embassy Note No. 0470 to the DFA proposing
the terms of the non-surrender bilateral agreement (Agreement, hereinafter) between the USA and the RP.

Via Exchange of Notes, dated May 13, 2003, the RP, represented by then DFA Secretary Ople, agreed with and
accepted the US proposals embodied under the US Embassy Note adverted to and put in effect
the Agreement with the US government. In esse, the Agreement aims to protect what it refers to and defines
as persons of the RP and US from frivolous and harassment suits that might be brought against them in
international tribunals. It is reflective of the increasing pace of the strategic security and defense partnership
between the two countries. As of May 2, 2003, similar bilateral agreements have been effected by and between
the US and 33 other countries.

The Agreement pertinently provides as follows:

1. For purposes of this Agreement, persons are current or former Government officials, employees
(including contractors), or military personnel or nationals of one Party.
2. Persons of one Party present in the territory of the other shall not, absent the express consent of the first
Party,
a. be surrendered or transferred by any means to any international tribunal for any purpose,
unless such tribunal has been established by the UN Security Council, or
b. be surrendered or transferred by any means to any other entity or third country, or
expelled to a third country, for the purpose of surrender to or transfer to any international
tribunal, unless such tribunal has been established by the UN Security Council.

3. When the [US] extradites, surrenders, or otherwise transfers a person of the Philippines to a third
country, the [US] will not agree to the surrender or transfer of that person by the third country to any
international tribunal, unless such tribunal has been established by the UN Security Council, absent the
express consent of the Government of the Republic of the Philippines [GRP].
4. When the [GRP] extradites, surrenders, or otherwise transfers a person of the [USA] to a third country,
the [GRP] will not agree to the surrender or transfer of that person by the third country to any
international tribunal, unless such tribunal has been established by the UN Security Council, absent the
express consent of the Government of the [US].
5. This Agreement shall remain in force until one year after the date on which one party notifies the other
of its intent to terminate the Agreement. The provisions of this Agreement shall continue to apply with
respect to any act occurring, or any allegation arising, before the effective date of termination.

According to Ambassador Ricciardone the exchange of diplomatic notes constituted a legally binding agreement under
international law; and that, under US law, the said agreement did not require the advice and consent of the US Senate.
In this proceeding, petitioner imputes grave abuse of discretion to respondents in concluding and ratifying the Agreement and
prays that it be struck down as unconstitutional, or at least declared as without force and effect.

ISSUE
WON the Agreement, which has not been submitted to the Senate for concurrence, contravenes and
undermines the Rome Statute and other treaties.

RULING

Petitioners initial challenge against the Agreement relates to form, its threshold posture being
that the Exchange of Notes cannot be a valid medium for concluding the Agreement.

Section 2, Article II of the Constitution, provides that the Philippines adopts the generally accepted
principles of international law and international jurisprudence as part of the law of the land and adheres
to the policy of peace, cooperation, and amity with all nations. An exchange of notes falls into the
category of inter-governmental agreements, which is an internationally accepted form of
international agreement. The United Nations Treaty Collections (Treaty Reference Guide) defines the
term as follows:
An exchange of notes is a record of a routine agreement, that has many similarities with the
private law contract. The agreement consists of the exchange of two documents, each of the
parties being in the possession of the one signed by the representative of the other. Under the
usual procedure, the accepting State repeats the text of the offering State to record its
assent. The signatories of the letters may be government Ministers, diplomats or departmental
heads. The technique of exchange of notes is frequently resorted to, either because of its
speedy procedure, or, sometimes, to avoid the process of legislative approval.

In another perspective, the terms exchange of notes and executive agreements have been used
interchangeably, exchange of notes being considered a form of executive agreement that becomes
binding through executive action. On the other hand, executive agreements concluded by the
President sometimes take the form of exchange of notes and at other times that of more formal
documents denominated agreements or protocols.

It is fairly clear from the foregoing disquisition that the Exchange of Notes be it viewed as the Non-
Surrender Agreement itself, or as an integral instrument of acceptance thereof or as consent to be
bound is a recognized mode of concluding a legally binding international written contract among
nations.
 Senate Concurrence Not Required

Article 2 of the Vienna Convention on the Law of Treaties defines a treaty as an international
agreement concluded between states in written form and governed by international law, whether
embodied in a single instrument or in two or more related instruments and whatever its particular
designation. International agreements may be in the form of:
1. treaties that require legislative concurrence after executive ratification; or
2. executive agreements that are similar to treaties, except that they do not require legislative
concurrence and are usually less formal and deal with a narrower range of subject matters
than treaties.

Under international law, there is no difference between treaties and executive agreements in terms of
their binding effects on the contracting states concerned, as long as the negotiating functionaries
have remained within their powers. Neither, on the domestic sphere, can one be held valid if it violates
the Constitution.

Authorities are, however, agreed that one is distinct from another for accepted reasons apart from the
concurrence-requirement aspect. As has been observed by US constitutional scholars, a treaty has
greater dignity than an executive agreement, because its constitutional efficacy is beyond doubt, a
treaty having behind it the authority of the President, the Senate, and the people; a ratified treaty,
unlike an executive agreement, takes precedence over any prior statutory enactment.

Petitioner parlays the notion that the Agreement is of dubious validity, partaking as it does of the
nature of a treaty; hence, it must be duly concurred in by the Senate.

We are not persuaded.

The categorization of subject matters that may be covered by international agreements mentioned
in Eastern Sea Trading is not cast in stone. There are no hard and fast rules on the propriety of
entering, on a given subject, into a treaty or an executive agreement as an instrument of
international relations. The primary consideration in the choice of the form of agreement is the
parties intent and desire to craft an international agreement in the form they so wish to further
their respective interests. Verily, the matter of form takes a back seat when it comes to effectiveness
and binding effect of the enforcement of a treaty or an executive agreement, as the parties in either
international agreement each labor under the pacta sunt servanda principle.

As Francis Sayre said in his work:

It would be useless to undertake to discuss here the large variety of executive agreements as
such concluded from time to time. Hundreds of executive agreements, other than those entered
into under the trade-agreement act, have been negotiated with foreign governments. They
cover such subjects as the inspection of vessels, navigation dues, income tax on shipping
profits, the admission of civil air craft, custom matters and commercial relations generally,
international claims, postal matters, the registration of trademarks and copyrights, etc.

What the Constitution merely prescribes is that treaties need the concurrence of the Senate by
a vote defined therein to complete the ratification process.

The Court has, in Eastern Sea Trading, as reiterated in Bayan, given recognition to the obligatory
effect of executive agreements without the concurrence of the Senate:

The right of the Executive to enter into binding agreements without the necessity of
subsequent Congressional approval has been confirmed by long usage. From the earliest
days of our history, we have entered executive agreements covering such subjects as
commercial and consular relations, most favored-nation rights, patent rights, trademark
and copyright protection, postal and navigation arrangements and the settlement of claims.
The validity of these has never been seriously questioned by our courts.
 The Agreement Not in Contravention of the Rome Statute

It is the petitioners next contention that the Agreement undermines the establishment of the ICC and is null and
void insofar as it unduly restricts the ICCs jurisdiction and infringes upon the effectivity of the Rome
Statute. Petitioner posits that the Agreement was constituted solely for the purpose of providing individuals or
groups of individuals with immunity from the jurisdiction of the ICC; and such grant of immunity through non-
surrender agreements allegedly does not legitimately fall within the scope of Art. 98 of the Rome Statute.

Contrary to petitioners pretense, the Agreement does not contravene or undermine, nor does it differ from, the
Rome Statute. Far from going against each other, one complements the other. As a matter of fact, the principle of
complementarity underpins the creation of the ICC. As aptly pointed out by respondents and admitted by
petitioners, the jurisdiction of the ICC is to be complementary to national criminal jurisdictions of the signatory
states. Art. 1 of the Rome Statute pertinently provides:

An International Crimininal Court (the Court) is hereby established. It shall have the power to
exercise its jurisdiction over persons for the most serious crimes of international concern, as
referred to in this Statute, and shall be complementary to national criminal jurisdictions. The
jurisdiction and functioning of the Court shall be governed by the provisions of this Statute.

Significantly, the sixth preambular paragraph of the Rome Statute declares that it is the duty of every State to
exercise its criminal jurisdiction over those responsible for international crimes. This provision indicates
that primary jurisdiction over the so-called international crimes rests, at the first instance, with the state
where the crime was committed; secondarily, with the ICC in appropriate situations contemplated under
Art. 17, par. 1 of the Rome Statute.

Of particular note is the application of the principle of ne bis in idem which again underscores the primacy of
the jurisdiction of a state vis-a-vis that of the ICC. As far as relevant, the provision states that no person who has
been tried by another court for conduct constituting crimes within its jurisdiction shall be tried by the
International Criminal Court with respect to the same conduct.

It is abundantly clear to us that the Rome Statute expressly recognizes the primary jurisdiction of states, like the
RP, over serious crimes committed within their respective borders, the complementary jurisdiction of the ICC
coming into play only when the signatory states are unwilling or unable to prosecute.

We refer to Art. 98(2) of the Rome Statute, which reads:

Article 98
Cooperation with respect to waiver of immunity and consent to surrender

2. The Court may not proceed with a request for surrender which would require the requested State to
act inconsistently with its obligations under international agreements pursuant to which the consent of a
sending State is required to surrender a person of that State to the Court, unless the Court can first
obtain the cooperation of the sending State for the giving of consent for the surrender.

Moreover, under international law, there is a considerable difference between a State-Party and a signatory to a
treaty. Under the Vienna Convention on the Law of Treaties, a signatory state is only obliged to refrain from
acts which would defeat the object and purpose of a treaty; whereas a State-Party, on the other hand, is legally
obliged to follow all the provisions of a treaty in good faith.

In the instant case, it bears stressing that the Philippines is only a signatory to the Rome Statute and not a
State-Party for lack of ratification by the Senate. Thus, it is only obliged to refrain from acts which would
defeat the object and purpose of the Rome Statute. Any argument obliging the Philippines to follow any
provision in the treaty would be premature.

As a result, petitioners argument that State-Parties with non-surrender agreements are prevented from
meeting their obligations under the Rome Statute must fail. These articles are only legally binding upon
State-Parties, not signatories.
 Sovereignty Limited by International Agreements

Petitioner next argues that the RP has, through the Agreement, abdicated its sovereignty by bargaining
away the jurisdiction of the ICC to prosecute US nationals, government officials/employees or military
personnel who commit serious crimes of international concerns in the Philippines. Formulating
petitioners argument a bit differently, the RP, by entering into the Agreement, does thereby abdicate its
sovereignty, abdication being done by its waiving or abandoning its right to seek recourse through the
Rome Statute of the ICC for erring Americans committing international crimes in the country.

We are not persuaded. As it were, the Agreement is but a form of affirmance and confirmance of
the Philippines national criminal jurisdiction. National criminal jurisdiction being primary, as
explained above, it is always the responsibility and within the prerogative of the RP either to
prosecute criminal offenses equally covered by the Rome Statute or to accede to the jurisdiction
of the ICC. Thus, the Philippines may decide to try persons of the US, as the term is understood
in the Agreement, under our national criminal justice system. Or it may opt not to exercise its
criminal jurisdiction over its erring citizens or over US persons committing high crimes in the
country and defer to the secondary criminal jurisdiction of the ICC over them. As to persons of
the US whom the Philippines refuses to prosecute, the country would, in effect, accord discretion to
the US to exercise either its national criminal jurisdiction over the person concerned or to give its
consent to the referral of the matter to the ICC for trial. In the same breath, the US must extend the
same privilege to the Philippines with respect to persons of the RP committing high crimes
within US territorial jurisdiction.

In the context of the Constitution, there can be no serious objection to the Philippines agreeing to
undertake the things set forth in the Agreement. Surely, one State can agree to waive jurisdiction to the
extent agreed upon to subjects of another State due to the recognition of the principle of extraterritorial
immunity.

To be sure, the nullity of the subject non-surrender agreement cannot be predicated on the postulate
that some of its provisions constitute a virtual abdication of its sovereignty. Almost every time a state
enters into an international agreement, it voluntarily sheds off part of its sovereignty. The Constitution,
as drafted, did not envision a reclusive Philippines isolated from the rest of the world. It even adheres,
as earlier stated, to the policy of cooperation and amity with all nations.

By their nature, treaties and international agreements actually have a limiting effect on the
otherwise encompassing and absolute nature of sovereignty. By their voluntary act, nations may
decide to surrender or waive some aspects of their state power or agree to limit the exercise of
their otherwise exclusive and absolute jurisdiction. The usual underlying consideration in this
partial surrender may be the greater benefits derived from a pact or a reciprocal undertaking of one
contracting party to grant the same privileges or immunities to the other. On the rationale that the
Philippines has adopted the generally accepted principles of international law as part of the law of the
land, a portion of sovereignty may be waived without violating the Constitution. Such waiver does not
amount to an unconstitutional diminution or deprivation of jurisdiction of Philippine courts.
 Agreement Not Immoral/Not at Variance with Principles of International Law

Petitioner urges that the Agreement be struck down as void ab initio for imposing immoral obligations
and/or being at variance with allegedly universally recognized principles of international law. The
immoral aspect proceeds from the fact that the Agreement, as petitioner would put it, leaves criminals
immune from responsibility for unimaginable atrocities that deeply shock the conscience of humanity;
it precludes our country from delivering an American criminal to the ICC

The Court is not persuaded. Suffice it to state in this regard that the non-surrender agreement,
as aptly described by the Solicitor General, is an assertion by the Philippines of its desire to try
and punish crimes under its national law. The agreement is a recognition of the primacy and
competence of the countrys judiciary to try offenses under its national criminal laws and
dispense justice fairly and judiciously.

Petitioner, we believe, labors under the erroneous impression that the Agreement would allow Filipinos
and Americans committing high crimes of international concern to escape criminal trial and
punishment. This is manifestly incorrect. Persons who may have committed acts penalized under the
Rome Statute can be prosecuted and punished in the Philippines or in the US; or with the consent of
the RP or the US, before the ICC, assuming, for the nonce, that all the formalities necessary to bind
both countries to the Rome Statute have been met. For perspective, what the Agreement contextually
prohibits is the surrender by either party of individuals to international tribunals, like the ICC,
without the consent of the other party, which may desire to prosecute the crime under its
existing laws. With the view we take of things, there is nothing immoral or violative of international
law concepts in the act of the Philippines of assuming criminal jurisdiction pursuant to the non-
surrender agreement over an offense considered criminal by both Philippine laws and the Rome
Statute.

Agreement Need Not Be in the Form of a Treaty

On December 11, 2009, then President Arroyo signed into law Republic Act No. (RA) 9851, otherwise known
as the Philippine Act on Crimes Against International Humanitarian Law, Genocide, and Other Crimes Against
Humanity. Sec. 17 of RA 9851, particularly the second paragraph thereof, provides:

Section 17. Jurisdiction. x x x x

In the interest of justice, the relevant Philippine authorities may dispense with the investigation or prosecution of a
crime punishable under this Act if another court or international tribunal is already conducting the investigation or
undertaking the prosecution of such crime. Instead, the authorities may surrender or extradite suspected or accused
persons in the Philippines to the appropriate international court, if any, or to another State pursuant to the applicable
extradition laws and treaties. (Emphasis supplied.)

A view is advanced that the Agreement amends existing municipal laws on the States obligation in relation to
grave crimes against the law of nations, i.e., genocide, crimes against humanity and war crimes. Relying on the
above-quoted statutory proviso, the view posits that the Philippine is required to surrender to the proper
international tribunal those persons accused of the grave crimes defined under RA 9851, if it does not exercise its
primary jurisdiction to prosecute them.

Posing the situation of a US national under prosecution by an international tribunal for any crime under
RA 9851, the Philippines has the option to surrender such US national to the international tribunal if it
decides not to prosecute such US national here. The view asserts that this option of the Philippines under
RA 9851 is not subject to the consent of the US, and any derogation of RA 9851, such as requiring the
consent of the US before the Philippines can exercise such option, requires an amendatory law. In line with
this scenario, the view strongly argues that the Agreement prevents the Philippines without the consent of the US
from surrendering to any international tribunal US nationals accused of crimes covered by RA 9851, and, thus, in
effect amends RA 9851. Consequently, the view is strongly impressed that the Agreement cannot be
embodied in a simple executive agreement in the form of an exchange of notes but must be implemented
through an extradition law or a treaty with the corresponding formalities.
We are unable to lend cogency to the view thus taken. For one, we find that the Agreement does
not amend or is repugnant to RA 9851. For another, the view does not clearly state what precise
principles of law, if any, the Agreement alters. And for a third, it does not demonstrate in the
concrete how the Agreement seeks to frustrate the objectives of the principles of law subsumed in
the Rome Statute.

Far from it, as earlier explained, the Agreement does not undermine the Rome Statute as the former
merely reinforces the primacy of the national jurisdiction of the US and the Philippines in prosecuting
criminal offenses committed by their respective citizens and military personnel, among others. The
jurisdiction of the ICC pursuant to the Rome Statute over high crimes indicated thereat is clearly and
unmistakably complementary to the national criminal jurisdiction of the signatory states.

Moreover, RA 9851 clearly: (1) defines and establishes the crimes against international humanitarian
law, genocide and other crimes against humanity; (2) provides penal sanctions and criminal liability for
their commission; and (3) establishes special courts for the prosecution of these crimes and for the
State to exercise primary criminal jurisdiction. Nowhere in RA 9851 is there a proviso that goes against
the tenor of the Agreement.

The view makes much of the above quoted second par. of Sec. 17, RA 9851 as requiring the Philippine
State to surrender to the proper international tribunal those persons accused of crimes sanctioned under
said law if it does not exercise its primary jurisdiction to prosecute such persons. This view is not
entirely correct, for the above quoted proviso clearly provides discretion to the Philippine State on
whether to surrender or not a person accused of the crimes under RA 9851. The statutory proviso uses
the word may. It is settled doctrine in statutory construction that the word may denotes discretion, and
cannot be construed as having mandatory effect. Thus, the pertinent second pararagraph of Sec. 17, RA
9851 is simply permissive on the part of the Philippine State.

Jus Cogens and Obligatio Erga Omnes

It has been held that genocide, war crimes and crimes against humanity have attained the status of
customary international law. Some even go so far as to state that these crimes have attained the status
of jus cogens.

Customary international law or international custom is a source of international law as stated in the
Statute of the ICJ. It is defined as the general and consistent practice of states recognized and followed
by them from a sense of legal obligation. In order to establish the customary status of a particular
norm, two elements must concur: State practice, the objective element; and opinio juris sive
necessitates, the subjective element.

State practice refers to the continuous repetition of the same or similar kind of acts or norms by
States. It is demonstrated upon the existence of the following elements:
1. generality;
2. uniformity and consistency; and
3. duration.

While, opinio juris, the psychological element, requires that the state practice or norm be carried out in
such a way, as to be evidence of a belief that this practice is rendered obligatory by the existence of a
rule of law requiring it.

The term jus cogens means the compelling law. Corollary, a jus cogens norm holds the highest
hierarchical position among all other customary norms and principles. As a result, jus cogens norms are
deemed peremptory and non-derogable. When applied to international crimes, jus cogens crimes have
been deemed so fundamental to the existence of a just international legal order that states cannot
derogate from them, even by agreement.
These jus cogens crimes relate to the principle of universal jurisdiction, i.e., any state may exercise
jurisdiction over an individual who commits certain heinous and widely condemned offenses, even
when no other recognized basis for jurisdiction exists. The rationale behind this principle is that the
crime committed is so egregious that it is considered to be committed against all members of the
international community and thus granting every State jurisdiction over the crime.

Therefore, even with the current lack of domestic legislation on the part of the US, it still has
both the doctrine of incorporation and universal jurisdiction to try these crimes.

Consequently, no matter how hard one insists, the ICC, as an international tribunal, found in the Rome
Statute is not declaratory of customary international law.

The first element of customary international law, i.e., established, widespread, and consistent practice
on the part of States, does not, under the premises, appear to be obtaining as reflected in this simple
reality: As of October 12, 2010, only 114 States have ratified the Rome Statute, subsequent to its
coming into force eight (8) years earlier, or on July 1, 2002. The fact that 114 States out of a total of
194[115] countries in the world, or roughly 58.76%, have ratified the Rome Statute casts doubt on
whether or not the perceived principles contained in the Statute have attained the status of customary
law and should be deemed as obligatory international law. The numbers even tend to argue against the
urgency of establishing international criminal courts envisioned in the Rome Statute. Lest it be
overlooked, the Philippines, judging by the action or inaction of its top officials, does not even feel
bound by the Rome Statute. Res ipsa loquitur. More than eight (8) years have elapsed since the
Philippine representative signed the Statute, but the treaty has not been transmitted to the Senate for the
ratification process.

Evidently, there is, as yet, no overwhelming consensus, let alone prevalent practice, among the
different countries in the world that the prosecution of internationally recognized crimes of genocide,
etc. should be handled by a particular international criminal court.

Absent the widespread/consistent-practice-of-states factor, the second or the psychological element

must be deemed non-existent, for an inquiry on why states behave the way they do presupposes, in the
first place, that they are actually behaving, as a matter of settled and consistent practice, in a certain
manner. This implicitly requires belief that the practice in question is rendered obligatory by the
existence of a rule of law requiring it. Like the first element, the second element has likewise not been
shown to be present.

Further, the Rome Statute itself rejects the concept of universal jurisdiction over the crimes enumerated
therein as evidenced by it requiring State consent. Even further, the Rome Statute specifically and
unequivocally requires that: This Statute is subject to ratification, acceptance or approval by signatory
States. These clearly negate the argument that such has already attained customary status.

More importantly, an act of the executive branch with a foreign government must be afforded great
respect. The power to enter into executive agreements has long been recognized to be lodged with the
President. This authority of the President to enter into executive agreements without the concurrence of
the Legislature has traditionally been recognized in Philippine jurisprudence. The rationale behind this
principle is the inviolable doctrine of separation of powers among the legislative, executive and
judicial branches of the government. Thus, absent any clear contravention of the law, courts should
exercise utmost caution in declaring any executive agreement invalid.

In light of the above consideration, the position or view that the challenged RP-US Non-
Surrender Agreement ought to be in the form of a treaty, to be effective, has to be rejected.

WHEREFORE, the petition for certiorari, mandamus and prohibition is hereby DISMISSED for lack
of merit. No costs.
SO ORDERED.
G.R. No. 185572 February 7, 2012

CHINA NATIONAL MACHINERY & EQUIPMENT CORP. (GROUP), Petitioner,

vs.
HON. CESAR D. SANTAMARIA, in his official capacity as Presiding Judge of Branch 145, Regional Trial Court of
Makati City, HERMINIO HARRY L. ROQUE, JR., JOEL R. BUTUYAN, ROGER R. RAYEL, ROMEL R.
BAGARES, CHRISTOPHER FRANCISCO C. BOLASTIG, LEAGUE OF URBAN POOR FOR ACTION (LUPA),
KILUSAN NG MARALITA SA MEYCAUAYAN (KMM-LUPA CHAPTER), DANILO M. CALDERON, VICENTE
C. ALBAN, MERLYN M. VAAL, LOLITA S. QUINONES, RICARDO D. LANOZO, JR., CONCHITA G. GOZO,
MA. TERESA D. ZEPEDA, JOSEFINA A. LANOZO, and SERGIO C. LEGASPI, JR., KALIPUNAN NG
DAMAYANG MAHIHIRAP (KADAMAY), EDY CLERIGO, RAMMIL DINGAL, NELSON B. TERRADO,
CARMEN DEUNIDA, and EDUARDO LEGSON, Respondents.
SERENO, J.:
Petitioner: China National Machinery & Equipment Corp. (Group) (CNMEG), represented by
its chairperson, Ren Hongbin
North Luzon Railways Corporation (Northrail), represented by its president, Jose L. Cortes, Jr.
Export Import Bank of China (EXIM Bank)

CNMEG entered into a Memorandum of Understanding with Northrail for the conduct of a feasibility
study on a possible railway line from Manila to San Fernando La Union (Northrail Project).

The EXIM Bank and theDepartment of Finance of the Philippines (DOF) entered into a Memorandum
of Understanding (Aug 30 MOU), wherein China agreed to extend Preferential Buyers Credit to the
Philippine government to finance the Northrail Project. The Chinese government designated EXIM
Bank as the lender, while the Philippine government named the DOF as the borrower. Under the
Aug 30 MOU, EXIM Bank agreed to extend an amount not exceeding USD 400,000,000 in favor of
the DOF, payable in 20 years, with a 5-year grace period, and at the rate of 3% per annum.

Chinese Ambassador to the Philippines, Wang Chungui (Amb. Wang), wrote a letter to DOF Secretary
Jose Isidro Camacho (Sec. Camacho) informing him of CNMEGs designation as the Prime Contractor
for the Northrail Project.

Northrail and CNMEG executed a Contract Agreement for the construction of Section I, Phase I of the
North Luzon Railway System from Caloocan to Malolos on a turnkey basis (the Contract Agreement).
The contract price for the Northrail Project was pegged at USD 421,050,000.

The Philippine government and EXIM Bank entered into a counterpart financial agreement Buyer
Credit Loan Agreement (the Loan Agreement). In the Loan Agreement, EXIM Bank agreed to extend
Preferential Buyers Credit in the amount of USD 400,000,000 in favor of the Philippine government in
order to finance the construction of Phase I of the Northrail Project.

Respondents filed a Complaint for Annulment of Contract and Injunction with Urgent Motion for Summary
Hearing to Determine the Existence of Facts and Circumstances Justifying the Issuance of Writs of Preliminary
Prohibitory and Mandatory Injunction and/or TRO against CNMEG, the Office of the Executive Secretary, the
DOF, the Department of Budget and Management, the National Economic Development Authority and Northrail.
In the Complaint, respondents alleged that the Contract Agreement and the Loan Agreement were void for being
contrary to:
a. the Constitution;
b. Republic Act No. 9184 (R.A. No. 9184), otherwise known as the Government Procurement Reform Act;
c. Presidential Decree No. 1445, otherwise known as the Government Auditing Code; and
d. Executive Order No. 292, otherwise known as the Administrative Code.

CNMEG filed a Motion to Dismiss arguing that the trial court did not have jurisdiction over (a) its person, as it
was an agent of the Chinese government, making it immune from suit, and (b) the subject matter, as the Northrail
Project was a product of an executive agreement.

The RTC denied the Motion to Dismiss. CNMEG filed a Motion for Reconsideration but still was denied. Thus,
CNMEG filed before the CA a Petition for Certiorari with Prayer for the Issuance of TRO and/or Writ of
Preliminary Injunction. The CA denied the Petition for Certiorari. Its Motion for Reconsideration was
denied. Hence this case.
ISSUE
Whether CNMEG is entitled to immunity, precluding it from being sued before a local court.
Whether the Contract Agreement is an executive agreement, such that it cannot be questioned
by or before a local court.

RULING
CNMEG prays for the dismissal of the Civil Case for lack of jurisdiction.

First issue: Whether CNMEG is entitled to immunity

This Court explained the doctrine of sovereign immunity in Holy See v. Rosario, to wit:
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.

The restrictive theory came about because of the entry of sovereign states into purely commercial
activities remotely connected with the discharge of governmental functions. This is particularly true with
respect to the Communist states which took control of nationalized business activities and international
trading.

In JUSMAG v. National Labor Relations Commission, this Court affirmed the Philippines adherence to the
restrictive theory as follows:
As it stands now, the application of the doctrine of immunity from suit has
been restricted to sovereign or governmental activities (jure imperii). The mantle of state
immunity cannot be extended to commercial, private and proprietary acts (jure gestionis).

Since the Philippines adheres to the restrictive theory, it is crucial to ascertain the legal nature of the act involved
whether the entity claiming immunity performs governmental, as opposed to proprietary, functions.

A thorough examination of the basic facts of the case would show that CNMEG is engaged in a proprietary
activity.

The parties executed the Contract Agreement for the purpose of constructing the Luzon Railways. The Contract
Agreement, however, does not on its own reveal whether the construction of the Luzon railways was meant to be
a proprietary endeavor. In order to fully understand the intention behind and the purpose of the entire
undertaking, the Contract Agreement must not be read in isolation. Instead, it must be construed in conjunction
with three other documents executed in relation to the Northrail Project, namely: (a) the Memorandum of
Understanding dated 14 September 2002 between Northrail and CNMEG; [30] (b) the letter of Amb. Wang dated 1
October 2003 addressed to Sec. Camacho;[31] and (c) the Loan Agreement.

Thus, despite petitioners claim that the EXIM Bank extended financial assistance to Northrail because the
bank was mandated by the Chinese government, and not because of any motivation to do business in the
Philippines, it is clear from the documents that the Northrail Project was a purely commercial transaction.

Admittedly, the Loan Agreement was entered into between EXIM Bank and the Philippine government, while the
Contract Agreement was between Northrail and CNMEG. Although the Contract Agreement is silent on the
classification of the legal nature of the transaction, the foregoing provisions of the Loan Agreement, which is an
inextricable part of the entire undertaking, nonetheless reveal the intention of the parties to the Northrail Project
to classify the whole venture as commercial or proprietary in character.

Thus, piecing together the content and tenor of the Contract Agreement, the Memorandum of Understanding
dated 14 September 2002, Amb. Wangs letter dated 1 October 2003, and the Loan Agreement would reveal the
desire of CNMEG to construct the Luzon Railways in pursuit of a purely commercial activity performed in
the ordinary course of its business.
 CNMEG failed to adduce evidence that it is immune from suit under Chinese law.

Even assuming arguendo that CNMEG performs governmental functions, such claim does not
automatically vest it with immunity. This view finds support in Malong v. Philippine National Railways,
in which this Court held that (i)mmunity from suit is determined by the character of the objects for which
the entity was organized.

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.

The principle of state immunity from suit, whether a local state or a foreign state, is reflected in
Section 9, Article XVI of the Constitution, which states that the State may not be sued without its
consent. Who or what consists of the State? For one, the doctrine is available to foreign States insofar
as they are sought to be sued in the courts of the local State, necessary as it is to avoid unduly vexing
the peace of nations.

State immunity from suit may be waived by general or special law. The special law can take the
form of the original charter of the incorporated government agency. Jurisprudence is replete with
examples of incorporated government agencies which were ruled not entitled to invoke immunity from
suit, owing to provisions in their charters manifesting their consent to be sued.

Applying the foregoing ruling to the case at bar, it is readily apparent that CNMEG cannot claim
immunity from suit, even if it contends that it performs governmental functions. Its designation as the
Primary Contractor does not automatically grant it immunity. Although CNMEG claims to be a
government-owned corporation, it failed to adduce evidence that it has not consented to be sued
under Chinese law. Thus, following this Courts ruling in Deutsche Gesellschaft, in the absence of
evidence to the contrary, CNMEG is to be presumed to be a government-owned and -controlled
corporation without an original charter. As a result, it has the capacity to sue and be sued under Section
36 of the Corporation Code.

CNMEG failed to present a certification from the Department of Foreign Affairs.

In Holy See, this Court reiterated the oft-cited doctrine that the determination by the Executive that an entity
is entitled to sovereign or diplomatic immunity is a political question conclusive upon the courts, to wit:
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.

The question now is whether any agency of the Executive Branch can make a determination of
immunity from suit, which may be considered as conclusive upon the courts. This Court, in Department
of Foreign Affairs (DFA) v. National Labor Relations Commission (NLRC), emphasized the DFAs
competence and authority to provide such necessary determination, to wit:
The DFAs function includes, among its other mandates, the determination of persons and
institutions covered by diplomatic immunities, a determination which, when challenge, (sic)
entitles it to seek relief from the court so as not to seriously impair the conduct of the country's
foreign relations. The DFA must be allowed to plead its case whenever necessary or advisable
to enable it to help keep the credibility of the Philippine government before the international
community. When international agreements are concluded, the parties thereto are deemed to
have likewise accepted the responsibility of seeing to it that their agreements are duly
regarded. In our country, this task falls principally of (sic) the DFA as being the highest
executive department with the competence and authority to so act in this aspect of the
international arena.
In the case at bar, CNMEG offers the Certification executed by the Economic and Commercial Office of
the Embassy of the Peoples Republic of China, stating that the Northrail Project is in pursuit of a
sovereign activity. Surely, this is not the kind of certification that can establish CNMEGs entitlement to
immunity from suit, as Holy See unequivocally refers to the determination of the Foreign Office of the
state where it is sued.

Further, CNMEG also claims that its immunity from suit has the executive endorsement of both the OSG
and the Office of the Government Corporate Counsel (OGCC), which must be respected by the courts.
However, as expressly enunciated in Deutsche Gesellschaft, this determination by the OSG, or by the
OGCC for that matter, does not inspire the same degree of confidence as a DFA certification. Even with a
DFA certification, however, it must be remembered that this Court is not precluded from making an
inquiry into the intrinsic correctness of such certification.

An agreement to submit any dispute to arbitration may be construed as an implicit waiver of

immunity from suit.

In the United States, the Foreign Sovereign Immunities Act of 1976 provides for a waiver by implication
of state immunity. In the said law, the agreement to submit disputes to arbitration in a foreign country is
construed as an implicit waiver of immunity from suit. Although there is no similar law in the
Philippines, there is reason to apply the legal reasoning behind the waiver in this case.

The Conditions of Contract, which is an integral part of the Contract Agreement, provides that if any
dispute arises between Northrail and CNMEG, both parties are bound to submit the matter to the HKIAC
for arbitration. In case the HKIAC makes an arbitral award in favor of Northrail, its enforcement in
the Philippines would be subject to the Special Rules on Alternative Dispute Resolution (Special Rules).
Rule 13 thereof provides for the Recognition and Enforcement of a Foreign Arbitral Award. Under Rules
13.2 and 13.3 of the Special Rules, the party to arbitration wishing to have an arbitral award recognized
and enforced in the Philippines must petition the proper regional trial court:
a. where the assets to be attached or levied upon is located;
b. where the acts to be enjoined are being performed;
c. in the principal place of business in the Philippines of any of the parties;
d. if any of the parties is an individual, where any of those individuals resides; or
e. in the National Capital Judicial Region.

From all the foregoing, it is clear that CNMEG has agreed that it will not be afforded immunity from suit.
Thus, the courts have the competence and jurisdiction to ascertain the validity of the Contract Agreement.
Second issue: Whether the Contract Agreement is an executive agreement

Article 2(1) of the Vienna Convention on the Law of Treaties (Vienna Convention) defines a treaty as
follows:
An international agreement concluded between States in written form and governed by
international law, whether embodied in a single instrument or in two or more related instruments
and whatever its particular designation.

In Bayan Muna v. Romulo, this Court held that an executive agreement is similar to a treaty, except that
an executive agreement:
1. does not require legislative concurrence;
2. is usually less formal; and
3. deals with a narrower range of subject matters.

Despite these differences, to be considered an executive agreement, the following three requisites
provided under the Vienna Convention must nevertheless concur:
a. the agreement must be between states;
b. it must be written; and
c. it must governed by international law.

The first and the third requisites do not obtain in the case at bar.
1. CNMEG is neither a government nor a government agency.
2. The Contract Agreement is to be governed by Philippine law.

CNMEG is neither a government nor a government agency.

The Contract Agreement was not concluded between the Philippines and China, but between
Northrail and CNMEG. By the terms of the Contract Agreement, Northrail is a government-owned or
-controlled corporation, while CNMEG is a corporation duly organized and created under the laws of the
Peoples Republic of China. Thus, both Northrail and CNMEG entered into the Contract Agreement
as entities with personalities distinct and separate from the Philippine and Chinese governments,
respectively.

Neither can it be said that CNMEG acted as agent of the Chinese government. As previously discussed,
the fact that Amb. Wang described CNMEG as a state corporation and declared its designation as the
Primary Contractor in the Northrail Project did not mean it was to perform sovereign functions on
behalf of China. That label was only descriptive of its nature as a state-owned corporation, and did not
preclude it from engaging in purely commercial or proprietary ventures.

The Contract Agreement is to be governed by Philippine law.

Since the Contract Agreement explicitly provides that Philippine law shall be applicable, the
parties have effectively conceded that their rights and obligations thereunder are not governed by
international law.

It is therefore clear from the foregoing reasons that the Contract Agreement does not partake of
the nature of an executive agreement. It is merely an ordinary commercial contract that can be
questioned before the local courts.

WHEREFORE, the instant Petition is DENIED. Petitioner China National Machinery & Equipment Corp. (Group) is not entitled
to immunity from suit, and the Contract Agreement is not an executive agreement. CNMEGs prayer for the issuance of a TRO
and/or Writ of Preliminary Injunction is DENIED for being moot and academic. This case is REMANDED to the Regional Trial
Court of Makati, Branch 145, for further proceedings as regards the validity of the contracts subject of Civil Case No. 06-203.

No pronouncement on costs of suit.

SO ORDERED.
Gabcikovo-Nagymaros Project (Hungary/Slovakia)

Procedural History:
NATURE OF CASE: Proceeding before the International Court of Justice

Overview:
FACT SUMMARY: Hungary (D) claimed that changed circumstances made enforcement of a treaty
with Slovakia (P) impossible.

FACTS: Hungary (D) and Slovakia (P) had agreed in 1977 to build and operate a system of locks
along the Danube River comprising a dam, reservoir, hydroelectric power plant, and flood control
improvements. This project was never completed and both countries underwent changes in their
political and economic systems beginning in 1989. Hungary (D) first suspended and then abandoned its
part of the works and later gave notice of termination of the treaty. In 1992, Hungary (D) and Slovakia
(P) asked the l.C.J. to decide on the basis of international law whether Hungary (D) was entitled to
suspend, and subsequently abandon, its part of the works, on the basis of the doctrine of impossibility
of performance.

Issue:
Must a fundamental change of circumstances have been unforeseen and must the existence of the
circumstances at the time of the treatys conclusion have constituted an essential basis of the consent of
the parties to be bound?

HOLDING AND DECISION: [Judge not stated in casebook excerpt.] Yes. A fundamental change of
circumstances must have been unforeseen and the existence of the circumstances at the time of the
treatys conclusion must have constituted an essential basis of the consent of the parties to be bound.
Where the prevalent political and economic conditions were not so closely linked to the object and
purpose of the treaty as to constitute an essential basis of the consent of the parties, there was no
fundamental change of circumstances. The plea of fundamental change of circumstances may only be
applied in exceptional cases.

Rule:
a fundamental change of circumstances must have been unforeseen and the existence of the
circumstances at the time of the treatys conclusion must have constituted an essential basis of the
consent of the parties to be bound.

Analysis:
The Court relied on the Vienna Convention. The Vienna Convention may be seen as a codification of
existing customary law on the subject of termination of a treaty on the basis of change in
circumstances. New developments in environmental law were not completely unforeseen.
Case concerning Gabcikovo-Nagymaros Project (Hungary/Slovakia)
Summary of the Judgment of 25 September 1997

History of the dispute

The Court recalls that the present case arose out of the signature, on 16 September 1977, by the Hungarian
People's Republic and the Czechoslovak People's Republic, of a treaty "concerning the construction and
operation of the Gabcikovo-Nagymaros System of Locks" (hereinafter called the "1977 Treaty"). The names of
the two contracting States have varied over the years; they are referred to as Hungary and Czechoslovakia. The
1977 Treaty provides for the construction and operation of a System of Locks by the parties as a "joint
investment". According to its Preamble, the system was designed to attain "the broad utilization of the natural
resources of the Bratislava-Budapest section of the Danube river for the development of water resources, energy,
transport, agriculture and other sectors of the national economy of the Contracting Parties". The joint investment
was thus essentially aimed at the production of hydroelectricity, the improvement of navigation on the relevant
section of the Danube and the protection of the areas along the banks against flooding. At the same time, by the
terms of the Treaty, the contracting parties undertook to ensure that the quality of water in the Danube was not
impaired as a result of the Project, and that compliance with the obligations for the protection of nature arising in
connection with the construction and operation of the System of Locks would be observed.

The 1977 Treaty describes the principal works to be constructed in pursuance of the Project. It provided for the
building of two series of locks, one at Gabcikovo (in Czechoslovak territory) and the other at Nagymaros (in
Hungarian territory), to constitute "a single and indivisible operational system of works".The Treaty further
provided that the technical specifications concerning the system would be included in the "Joint Contractual
Plan" which was to be drawn up in accordance with the Agreement signed by the two Governments for this
purpose on 6 May 1976. It also provided for the construction, financing and management of the works on a joint
basis in which the Parties participated in equal measure.

The Court observes that the Project was thus to have taken the form of an integrated joint project with the two
contracting parties on an equal footing in respect of the financing, construction and operation of the works. Its
single and indivisible nature was to have been realized through the Joint Contractual Plan which complemented
the Treaty. In particular, Hungary would have had control of the sluices at Dunakiliti and the works at
Nagymaros, whereas Czechoslovakia would have had control of the works at Gabcikovo.

The schedule of work had for its part been fixed in an Agreement on mutual assistance signed by the two parties on 16
September 1977, at the same time as the Treaty itself. The Agreement made some adjustments to the allocation of the works
between the parties as laid down by the Treaty. Work on the Project started in 1978. On Hungary's initiative, the two parties
first agreed, by two Protocols signed on 10 October 1983 to slow the work down and to postpone putting into operation the
power plants, and then, by a Protocol signed on 6 February 1989 to accelerate the Project.

As a result of intense criticism which the Project had generated in Hungary, the Hungarian Government decided
to suspend the works at Nagymaros pending the completion of various studies which the competent authorities
were to finish before 31 July 1989. On 21 July 1989, the Hungarian Government extended the suspension of the
works at Nagymaros until 31 October 1989, and, in addition, suspended the works at Dunakiliti until the same
date. Lastly, on 27 October 1989, Hungary decided to abandon the works at Nagymaros and to maintain the status
quo at Dunakiliti.

During this period, negotiations took place between the parties. Czechoslovakia also started investigating
alternative solutions. One of them, an alternative solution subsequently known as "Variant C", entailed a
unilateral diversion of the Danube by Czechoslovakia on its territory some 10 kilometres upstream of Dunakiliti.
In its final stage, Variant C included the construction at Cunovo of an overflow dam and a levee linking that dam
to the south bank of the bypass canal. Provision was made for ancillary works.
On 23 July 1991, the Slovak Government decided "to begin, in September 1991, construction to put the
Gabcikovo Project into operation by the provisional solution". Work on Variant C began in November 1991.
Discussions continued between the two parties but to no avail, and, on 19 May 1992, the Hungarian Government
transmitted to the Czechoslovak Government a Note Verbale terminating the 1977 Treaty with effect from 25
May 1992. On 15 October 1992, Czechoslovakia began work to enable the Danube to be closed and, starting on
23 October, proceeded to the damming of the river.

The Court finally takes note of the fact that on 1 January 1993 Slovakia became an independent State; that in the Special
Agreement thereafter concluded between Hungary and Slovakia the Parties agreed to establish and implement a temporary
water management regime for the Danube; and that finally they concluded an Agreement in respect of it on 19 April 1995,
which would come to an end 14 days after the Judgment of the Court. The Court also observes that not only the 1977 Treaty,
but also the "related instruments" are covered in the preamble to the Special Agreement and that the Parties, when
concentrating their reasoning on the 1977 Treaty, appear to have extended their arguments to the "related instruments".
 Suspension and abandonment by Hungary, in 1989, of works on the Project

The Court cannot accept Hungary's argument to the effect that, in 1989, in suspending and
subsequently abandoning the works for which it was still responsible at Nagymaros and at Dunakiliti,
it did not suspend the application of the 1977 Treaty itself or then reject that Treaty. The conduct of
Hungary at that time can only be interpreted as an expression of its unwillingness to comply with at
least some of the provisions of the Treaty and the Protocol of 6 February 1989, as specified in the Joint
Contractual Plan. The effect of Hungary's conduct was to render impossible the accomplishment of the
system of works that the Treaty expressly described as "single and indivisible".

The Court then considers the question of whether there was, in 1989, a state of necessity which
would have permitted Hungary, without incurring international responsibility, to suspend and
abandon works that it was committed to perform in accordance with the 1977 Treaty and related
instruments.

The Court observes, first of all, that the state of necessity is a ground recognized by customary
international law for precluding the wrongfulness of an act not in conformity with an
international obligation. It considers moreover that such ground for precluding wrongfulness can
only be accepted on an exceptional basis. The following basic conditions set forth in Article 33 of the
Draft Article on the International Responsibility of States by the International Law Commission are
relevant in the present case:
1. it must have been occasioned by an "essential interest" of the State which is the author of
the act conflicting with one of its international obligations;
2. that interest must have been threatened by a "grave and imminent peril";
3. the act being challenged must have been the "only means" of safeguarding that interest;
4. that act must not have "seriously impaired an essential interest" of the State towards which
the obligation existed; and
5. the State which is the author of that act must not have "contributed to the occurrence of the
state of necessity".

Those conditions reflect customary international law.

The Court has no difficulty in acknowledging that the concerns expressed by Hungary for its
natural environment in the region affected by the Gabcikovo-Nagymaros Project related to an
"essential interest" of that State.

It is of the view, however, that, with respect to both Nagymaros and Gabcikovo, the perils invoked by
Hungary, without prejudging their possible gravity, were not sufficiently established in 1989, nor
were they "imminent"; and that Hungary had available to it at that time means of responding to
these perceived perils other than the suspension and abandonment of works with which it had been
entrusted. What is more, negotiations were under way which might have led to a review of the
Project and the extension of some of its time-limits, without there being need to abandon it.

The Court further notes that Hungary when it decided to conclude the 1977 Treaty, was presumably
aware of the situation as then known; and that the need to ensure the protection of the environment had
not escaped the parties. Neither can it fail to note the positions taken by Hungary after the entry into
force of the 1977 Treaty. Slowly, speeded up. The Court infers that, in the present case, even if it had
been established that there was, in 1989, a state of necessity linked to the performance of the 1977
Treaty, Hungary would not have been permitted to rely upon that state of necessity in order to justify
its failure to comply with its treaty obligations, as it had helped, by act or omission to bring it about.
In the light of the conclusions reached above, the Court finds that Hungary was not entitled to suspend
and subsequently abandon, in 1989, the works on the Nagymaros Project and on the part of the
Gabcikovo Project for which the 1977 Treaty and related instruments attributed responsibility to it.
Notification by Hungary, on 19 May 1992, of the termination of the 1977 Treaty and related
instruments

"what are the legal effects of the notification, on 19 May 1992, of the termination of
the Treaty by the Republic of Hungary".

During the proceedings, Hungary presented five arguments in support of the lawfulness, and thus the
effectiveness, of its notification of termination. These were:
1. the existence of a state of necessity;
2. the impossibility of performance of the Treaty;
3. the occurrence of a fundamental change of circumstances;
4. the material breach of the Treaty by Czechoslovakia; and,
5. finally, the development of new norms of international environmental law.
6.
State of necessity
See Suspension and abandonment by Hungary, in 1989, of works on the Project

Impossibility of performance
The Court finds that it is not necessary to determine whether the term "object" in Article 61 of the
Vienna Convention of 1969 on the Law of Treaties (which speaks of "permanent disappearance or
destruction of an object indispensable for the execution of the treaty" as a ground for
terminating or withdrawing from it) can also be understood to embrace a legal regime as in any
event, even if that were the case, it would have to conclude that in this instance that regime had not
definitively ceased to exist. The 1977 Treaty and in particular its Articles 15, 19 and 20 actually
made available to the parties the necessary means to proceed at any time, by negotiation, to the
required readjustments between economic imperatives and ecological imperatives.

Fundamental change of circumstances

In the Court's view, the prevalent political conditions were not so closely linked to the object and
purpose of the Treaty that they constituted an essential basis of the consent of the parties and, in
changing, radically altered the extent of the obligations still to be performed. The same holds good for
the economic system in force at the time of the conclusion of the 1977 Treaty. Nor does the Court
consider that new developments in the state of environmental knowledge and of environmental law can
be said to have been completely unforeseen. What is more, the formulation of Articles 15, 19 and 20 is
designed to accommodate change. The changed circumstances advanced by Hungary are thus, in the
Court's view, not of such a nature, either individually or collectively, that their effect would radically
transform the extent of the obligations still to be performed in order to accomplish the Project.

Material breach of the Treaty

Hungary's main argument for invoking a material breach of the Treaty was the construction and
putting into operation of Variant c. The Court pointed out that it had already found that Czechoslovakia
violated the Treaty only when it diverted the waters of the Danube into the bypass canal in October
1992. In constructing the works which would lead to the putting into operation of Variant C,
Czechoslovakia did not act unlawfully. In the Court's view, therefore, the notification of termination by
Hungary on 19 May 1992 was premature. No breach of the Treaty by Czechoslovakia had yet taken
place and consequently Hungary was not entitled to invoke any such breach of the Treaty as a ground
for terminating it when it did.

Development of new norms of international environmental law

The Court notes that neither of the Parties contended that new peremptory norms of environmental law
had emerged since the conclusion of the 1977 Treaty; and the Court will consequently not be required
to examine the scope of Article 64 of the Vienna Convention on the Law of Treaties (which treats of
the voidance and termination of a treaty because of the emergence of a new peremptory norm of
general international law (jus cogens)). On the other hand, the Court wishes to point out that newly
developed norms of environmental law are relevant for the implementation of the Treaty and that the
parties could, by agreement, incorporate them through the application of Articles 15, 19 and 20 of the
Treaty. These articles do not contain specific obligations of performance but require the parties, in
carrying out their obligations to ensure that the quality of water in the Danube is not impaired and that
nature is protected, to take new environmental norms into consideration when agreeing upon the means
to be specified in the Joint Contractual Plan. By inserting these evolving provisions in the Treaty, the
parties recognized the potential necessity to adapt the Project. Consequently, the Treaty is not static,
and is open to adapt to emerging norms of international law. By means of Articles 15 and 19, new
environmental norms can be incorporated in the Joint Contractual Plan. The awareness of the
vulnerability of the environment and the recognition that environmental risks have to be assessed on a
continuous basis have become much stronger in the years since the Treaty's conclusion. These new
concerns have enhanced the relevance of Articles 15, 19 and 20. The Court recognizes that both Parties
agree on the need to take environmental concerns seriously and to take the required precautionary
measures, but they fundamentally disagree on the consequences this has for the joint Project. In such a
case, third-party involvement may be helpful and instrumental in finding a solution, provided each of
the Parties is flexible in its position.

Finally, the Court is of the view that although it has found that both Hungary and
Czechoslovakia failed to comply with their obligations under the 1977 Treaty, this reciprocal
wrongful conduct did not bring the Treaty to an end nor justify its termination.

In the light of the conclusions it has reached above, the Court finds that the notification of
termination by Hungary of 19 May 1992 did not have the legal effect of terminating the 1977 Treaty
and related instruments.

Dissolution of Czechoslovakia

The Court then turns to the question whether Slovakia became a party to the 1977 Treaty as successor
to Czechoslovakia. As an alternative argument, Hungary contended that, even if the Treaty
survived the notification of termination, in any event it ceased to be in force as a treaty on 31
December 1992, as a result of the "disappearance of one of the parties." On that date,
Czechoslovakia ceased to exist as a legal entity, and on 1 January 1993 the Czech Republic and
the Slovak Republic came into existence.

The Court does not find it necessary for the purposes of the present case to enter into a discussion of whether or
not Article 34 of the 1978 Vienna Convention on Succession of States in respect of treaties (in which a rule of
automatic succession to all treaties is provided for) reflects the state of customary international law. More
relevant to its present analysis is the particular nature and character of the 1977 Treaty. An examination of this
Treaty confirms that, aside from its undoubted nature as a joint investment, its major elements were the proposed
construction and joint operation of a large, integrated and indivisible complex of structures and installations on
specific parts of the respective territories of Hungary and Czechoslovakia along the Danube. The Treaty also
established the navigational regime for an important sector of an international waterway, in particular the
relocation of the main international shipping lane to the bypass canal. In so doing, it inescapably created a
situation in which the interests of other users of the Danube were affected. Furthermore, the interests of third
States were expressly acknowledged in Article 18, whereby the parties undertook to ensure "uninterrupted and
safe navigation on the international fairway" in accordance with their obligations under the Convention of 18
August 1948 concerning the Regime of Navigation on the Danube.

The Court then refers to Article 12 of the 1978 Vienna Convention on Succession of States in
respect of Treaties, which reflects the principle that treaties of a territorial character have been
regarded both in traditional doctrine and in modern opinion as unaffected by a succession of
States. The Court considers that Article 12 reflects a rule of customary international law; and notes
that neither of the Parties disputed this. It concludes that the content of the 1977 Treaty indicates
that it must be regarded as establishing a territorial regime within the meaning of Article 12 of
1978 Vienna Convention. It created rights and obligations "attaching to" the parts of the Danube
to which it relates; thus the Treaty itself could not be affected by a succession of States. The
Court therefore concludes that the 1977 Treaty became binding upon Slovakia on 1 January
1993.
Legal consequences of the Judgment
The Court observes that the part of its Judgment which answers the questions in Article 2, paragraph 1,
of the Special Agreement has a declaratory character. It deals with the past conduct of the Parties and
determines the lawfulness or unlawfulness of that conduct between 1989 and 1992 as well as its effects
on the existence of the Treaty. Now the Court has, on the basis of the foregoing findings, to determine
what the future conduct of the Parties should be. This part of the Judgment is prescriptive rather than
declaratory because it determines what the rights and obligations of the Parties are. The Parties will
have to seek agreement on the modalities of the execution of the Judgment in the light of this
determination, as they agreed to do in Article 5 of the Special Agreement.

In this regard it is of cardinal importance that the Court has found that the 1977 Treaty is still in
force and consequently governs the relationship between the Parties. That relationship is also
determined by the rules of other relevant conventions to which the two States are party, by the rules of
general international law and, in this particular case, by the rules of State responsibility; but it is
governed, above all, by the applicable rules of the 1977 Treaty as a lex specialis. The Court observes
that it cannot, however, disregard the fact that the Treaty has not been fully implemented by
either party for years, and indeed that their acts of commission and omission have contributed to
creating the factual situation that now exists. Nor can it overlook that factual situation or the
practical possibilities and impossibilities to which it gives rise when deciding on the legal requirements
for the future conduct of the Parties. What is essential, therefore, is that the factual situation as it has
developed since 1989 shall be placed within the context of the preserved and developing treaty
relationship, in order to achieve its object and purpose in so far as that is feasible. For it is only then
that the irregular state of affairs which exists as the result of the failure of both Parties to comply with
their treaty obligations can be remedied.

The Court points out that the 1977 Treaty is not only a joint investment project for the production of
energy, but it was designed to serve other objectives as well: the improvement of the navigability of the
Danube, flood control and regulation of ice-discharge, and the protection of the natural environment. In
order to achieve these objectives the parties accepted obligations of conduct, obligations of
performance, and obligations of result. The Court is of the opinion that the Parties are under a legal
obligation, during the negotiations to be held by virtue of Article 5 of the Special Agreement, to
consider, within the context of the 1977 Treaty, in what way the multiple objectives of the Treaty can
best be served, keeping in mind that all of them should be fulfilled.

It is clear that the Project's impact upon, and its implications for, the environment are of necessity a key
issue. In order to evaluate the environmental risks, current standards must be taken into consideration.
This is not only allowed by the wording of Articles 15 and 19, but even prescribed, to the extent that
these articles impose a continuing and thus necessarily evolving obligation on the parties to maintain
the quality of the water of the Danube and to protect nature. The Court is mindful that, in the field of
environmental protection, vigilance and prevention are required on account of the often irreversible
character of damage to the environment and of the limitations inherent in the very mechanism of
reparation of this type of damage. New norms and standards have been developed, set forth in a great
number of instruments during the last two decades. Such new norms have to be taken into
consideration, and such new standards given proper weight, not only when States contemplate new
activities but also when continuing with activities begun in the past. For the purposes of the present
case, this means that the Parties together should look afresh at the effects on the environment of the
operation of the Gabcikovo power plant. In particular they must find a satisfactory solution for the
volume of water to be released into the old bed of the Danube and into the side-arms on both sides of
the river.

What is required in the present case by the rule pacta sunt servanda, as reflected in Article 26 of
the Vienna Convention of 1969 on the Law of Treaties, is that the Parties find an agreed solution
within the co-operative context of the Treaty. Article 26 combines two elements, which are of equal
importance. It provides that "Every treaty in force is binding upon the parties to it and must be
performed by them in good faith". This latter element, in the Court's view, implies that, in this
case, it is the purpose of the Treaty, and the intentions of the parties in concluding it, which
should prevail over its literal application. The principle of good faith obliges the Parties to apply
it in a reasonable way and in such a manner that its purpose can be realized.

The 1977 Treaty not only contains a joint investment programme, it also establishes a regime.
According to the Treaty, the main structures of the System of Locks are the joint property of the
Parties; their operation will take the form of a co-ordinated single unit; and the benefits of the project
shall be equally shared. Since the Court has found that the Treaty is still in force and that, under
its terms, the joint regime is a basic element, it considers that, unless the Parties agree otherwise,
such a regime should be restored. The Court is of the opinion that the works at Cunovo should
become a jointly operated unit within the meaning of Article 10, paragraph 1, in view of their pivotal
role in the operation of what remains of the Project and for the water-management regime. The dam at
Cunovo has taken over the role which was originally destined for the works at Dunakiliti, and therefore
should have a similar status. The Court also concludes that Variant C, which it considers operates in a
manner incompatible with the Treaty, should be made to conform to it. It observes that re-
establishment of the joint regime will also reflect in an optimal way the concept of common utilization
of shared water resources for the achievement of the several objectives mentioned in the Treaty.

Having thus far indicated what in its view should be the effects of its finding that the 1977 Treaty
is still in force, the Court turns to the legal consequences of the internationally wrongful acts
committed by the Parties, as it had also been asked by both Parties to determine the
consequences of the Judgment as they bear upon payment of damages.

The Court has not been asked at this stage to determine the quantum of damages due, but to indicate on
what basis they should be paid. Both Parties claimed to have suffered considerable financial losses and
both claim pecuniary compensation for them.

In the Judgment, the Court has concluded that both Parties committed internationally wrongful acts,
and it has noted that those acts gave rise to the damage sustained by the Parties; consequently,
Hungary and Slovakia are both under an obligation to pay compensation and are both entitled to
obtain compensation. The Court observes, however, that given the fact, that there have been
intersecting wrongs by both Parties, the issue of compensation could satisfactorily be resolved in the
framework of an overall settlement if each of the Parties were to renounce or cancel all financial
claims and counter-claims. At the same time, the Court wishes to point out that the settlement of
accounts for the construction of the works is different from the issue of compensation, and must be
resolved in accordance with the 1977 Treaty and related instruments. If Hungary is to share in the
operation and benefits of the Cunovo complex, it must pay a proportionate share of the building and
running costs.