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REPUBLIC OF INDONESIA v. JAMES VINZON

FACTS:

The Republic of Indonesia, represented by its Counsellor, Siti Partinah, entered into a Maintenance Agreement with James Vinzon, sole proprietor of Vinzon Trade and Services. The agreement stated that Vinzon would maintain specified equipment at the Embassy Main Building, Embassy Annex Building, and the official residence of Ambassador Soeratmin. The agreement was effective for four years and would renew automatically unless canceled. Prior to the expiration, the petitioner informed Vinzon that the renewal would be at the discretion of the incoming Chief of Administration. When the new Chief of Administration assumed office, he allegedly found Vinzon's work unsatisfactory and terminated the agreement. Vinzon claimed that the termination was arbitrary and unlawful, citing various circumstances indicating satisfaction with his services. Vinzon filed a complaint against the petitioners, and the trial court denied the petitioners' Motion to Dismiss, which was brought up to the Court of Appeals. The Court of Appeals denied the petition, leading to this petition for review on certiorari. The issue raised in this case is whether or not the Court of Appeals erred in sustaining the trial court's decision that the petitioners have waived their immunity from suit based on the provision in the Maintenance Agreement.

ISSUES:

  1. Whether or not the Republic of Indonesia waived its sovereign immunity from suit by entering into the Maintenance Agreement with respondent.

  2. Whether or not petitioners Ambassador Soeratmin and Minister Counsellor Kasim can be sued in their private capacities for actions related to the termination of the Maintenance Agreement.

RULING:

  1. Republic of Indonesia's Sovereign Immunity:

    • The Republic of Indonesia did not waive its sovereign immunity by entering into the Maintenance Agreement with the respondent. The maintenance of a diplomatic mission, including its premises and equipment, is an act jure imperii and falls under the sovereign functions of the State. The clause in the Maintenance Agreement stating that any legal action shall be settled according to Philippines laws and by a specific court does not constitute an explicit waiver of sovereign immunity.

  2. Ambassador Soeratmin and Minister Counsellor Kasim's Immunity:

    • Petitioners Ambassador Soeratmin and Minister Counsellor Kasim cannot be sued in their private capacities for actions related to the termination of the Maintenance Agreement. Their actions fall within their official functions as diplomatic agents, and thus they enjoy immunity from jurisdiction under the Vienna Convention on Diplomatic Relations.

PRINCIPLES:

  • Sovereign Immunity: A State cannot be sued without its consent, which derives from the principle of sovereign equality of States (par in parem non habet imperium).

  • Restrictive Theory of Sovereign Immunity: Sovereign immunity applies to public acts or acts jure imperii, but not to private acts or acts jure gestionis.

  • Diplomatic Immunity: Under the Vienna Convention on Diplomatic Relations, diplomatic agents enjoy immunity from criminal, civil, and administrative jurisdiction of the receiving State for acts performed in the exercise of their official functions.

  • Waiver of Immunity: Submission to jurisdiction must be clear and unequivocal, either explicitly or by necessary implication. The language indicating the applicability of local laws in a contract does not necessarily imply a waiver of sovereign immunity.