G.R No. L-35645 – 221 Phil. 179 – 136 SCRA 487 – Political Law – Public International Law – State Immunity From Suit – A Foreign Sovereign is Immune From Suit
Eligio de Guzman & Co., Inc., after bidding, entered into a contract with the United States of America for the construction/repair of wharves and piers at the Naval Base in Subic, Zambales which were damaged by a typhoon. When a dispute arose over alleged unpaid balances and breach of contract, Ruiz filed a complaint in a Philippine court against the United States, seeking to recover monetary damages.
The U.S. government moved to dismiss the case, invoking state immunity from suit, arguing that as a sovereign state, it could not be sued in Philippine courts without its express consent. Judge V.M. Ruiz denied the motion as well as the subsequent motions for reconsideration.
ISSUE: Whether or not the United States of America, by entering into a construction contract, waived its sovereign immunity from suit.
HELD: No. The Supreme Court ruled that the United States did not waive its sovereign immunity from suit.
A foreign state may be sued in Philippine courts only when it has given consent, either expressly or impliedly.
Entering into a contract does not automatically mean the foreign state waives its immunity. The nature of the act involved determines whether immunity is waived.
The contract in question was for the construction of military facilities in connection with sovereign functions (defense/military operations).
Therefore, the U.S. acted in pursuit of a governmental function (jure imperii) and not in a commercial capacity (jure gestionis).
As such, no implied waiver of immunity exists. The U.S. retained its immunity from suit, and the case must be dismissed.
A foreign state is immune from suit in Philippine courts for acts performed in pursuit of sovereign functions (jure imperii), even if such acts involve entering into a contract.
Note: This is an AI-generated case digest.
