FACTS:

On September 7, 1971, the governments of the Federal Republic of Germany and the Republic of the Philippines ratified an Agreement concerning Technical Co-operation, which aimed to promote the technical and economic development of both countries. On December 10, 1999, the Philippine government and the German government entered into an Arrangement to further promote a project called Social Health Insurance - Networking and Empowerment (SHINE), which specified the obligations of both governments in implementing the project.

This case involves a dispute between private respondents, who were contract employees hired by GTZ to work for the SHINE project, and the project manager, Anne Nicolay. Private respondents raised several issues and subsequently had their employment terminated. They filed a complaint for illegal dismissal against GTZ, its Manila office director, assistant project manager, and Nicolay.

The Labor Arbiter denied GTZ's Motion to Dismiss and found in favor of the private respondents, stating a lack of due process and failure to observe notice requirements. GTZ filed a special civil action for certiorari with the Court of Appeals, which dismissed the petition and stated that the appropriate remedy was an appeal to the NLRC. GTZ then filed a petition for review with the Supreme Court arguing for jurisdiction and whether the complaint for illegal dismissal should have been dismissed.

In a separate case, Galvez filed a petition for certiorari with the CA questioning the orders issued by the RTC. The CA dismissed Galvez's petition, and Galvez filed a petition for review before the Supreme Court, arguing that the refusal of the CA to grant the petition for certiorari was incorrect and that the RTC's orders were null and void. The OSG supported Galvez's petition, citing jurisprudence that a writ of certiorari can be allowed even when appeal is available if the orders of the lower court were issued in excess of or without jurisdiction.

ISSUES:

1. Whether the Court of Appeals has jurisdiction to review decisions ruling on complaints for illegal dismissal.

2. Whether the failure to appeal the decision of the Labor Arbiter to the NLRC renders the judgment final and executory.

3. Whether a writ of certiorari is appropriate when the orders of the lower court were issued either in excess of or without jurisdiction.

4. Whether GTZ enjoys immunity from suit.

5. Is the GTZ, as the implementing agency of the German government, entitled to sovereign immunity from suit?

6. Is GTZ an incorporated agency of the German government?

7. Whether GTZ is entitled to immunity from suit as an implementing agency of the Federal Republic of Germany.

8. Whether GTZ has proven that it has not consented to be sued despite being owned by the Federal Republic of Germany.

9. Whether GTZ, a German government agency, is entitled to sovereign or diplomatic immunity from suit.

10. Whether GTZ has obtained the necessary certification or endorsement from the Philippine Department of Foreign Affairs (DFA) to establish its claim of immunity.

11. Whether the doctrine of state immunity from suit applies in this case.

12. Whether the immunity of state-owned educational institutions from suit is absolute.

13. Whether the consent to be sued by a state instrumentality or agency can be inferred from a specific law.

RULING:

1. Yes. The Court of Appeals has jurisdiction to review decisions ruling on complaints for illegal dismissal. This is affirmed by jurisprudence.

2. Yes. The failure to correctly appeal the decision of the Labor Arbiter to the NLRC renders the judgment final and executory.

3. Yes. A writ of certiorari is appropriate when the orders of the lower court were issued either in excess of or without jurisdiction.

4. The issue of whether GTZ enjoys immunity from suit was not directly addressed in the text provided.

5. No, GTZ is not entitled to sovereign immunity from suit. Even if GTZ is performing governmental functions, it can still be subject to suit if its charter allows it to sue and be sued.

6. The court could not definitively determine whether GTZ is an incorporated agency of the German government or a private corporation because there was insufficient evidence provided. The term "implementing agency" does not provide enough information about GTZ's legal nature.

7. GTZ is not entitled to immunity from suit as an implementing agency of the Federal Republic of Germany. Although GTZ describes itself as a federal enterprise and federally owned, it was organized under private law and has a legal personality independent of the Federal Republic of Germany. GTZ's self-description on its own official website supports the notion that it is a company organized under private law. Furthermore, there is no evidence to establish that GTZ has not consented to be sued under German law. In the absence of such evidence, GTZ is akin to a government-owned or controlled corporation without an original charter which, under the Corporation Code, has expressly consented to be sued.

8. GTZ has failed to prove that it has not consented to be sued under German law. In the absence of evidence to the contrary, foreign laws on a particular subject are presumed to be the same as those of the Philippines. GTZ has not established that it enjoys immunity from suit. Therefore, GTZ is not entitled to immunity from suit in this case.

9. The Supreme Court held that GTZ failed to establish with satisfaction that it enjoys immunity from suit. Its claim of immunity was not supported by the necessary certification or endorsement from the DFA. The Court also noted that the Solicitor General's endorsement of GTZ's claim does not substitute for the DFA certification. As a result, both the Labor Arbiter and the Court of Appeals were correct in dismissing the complaint against GTZ. The Court further ruled that GTZ's failure to properly appeal the Labor Arbiter's decision to the National Labor Relations Commission (NLRC) and its direct recourse to the Court of Appeals resulted in the Labor Arbiter's decision becoming final and executory. All other questions related to the case, such as whether the private respondents were illegally dismissed, cannot be reviewed due to the finality of the Labor Arbiter's decision.

10. The petition is denied. The doctrine of state immunity from suit applies in this case. The immunity of state-owned educational institutions from suit is not absolute but is subject to certain limitations. The consent to be sued by a state instrumentality or agency can be inferred from a specific law.

PRINCIPLES:

• The proper recourse from the decision of the Labor Arbiter is to first appeal the same to the NLRC.

• The failure to employ available intermediate recourses, such as a motion for reconsideration, is not a fatal infirmity if the ruling assailed is a patent nullity.

• The doctrine of state immunity from suit applies to both local and foreign states. It is reflected in Section 9, Article XVI of the Constitution, which states that "the State may not be sued without its consent."

• The parameters of the legal personality of an agency must be ascertained to determine if it can invoke state immunity from suit. The distinction lies in whether the agency is incorporated or unincorporated.

• Municipal corporations, including provinces, cities, and agencies of the state, can enjoy sovereign immunity from suit when performing governmental functions, but they can be subject to suit if their charter allows it.

• State immunity from suit can be waived by general or special law, including provisions in the entity's charter that manifest their consent to be sued.

• The presence of the phrase "sue and be sued" in an entity's charter indicates that it has the power to be sued and submit to the jurisdiction of courts, regardless of whether it performs governmental or proprietary functions.

• The establishment of a private corporation by the government, with the power to sue and be sued without qualification on the cause of action, indicates that the corporation can be subject to a lawsuit, including for tort claims.

• The lack of evidence regarding an entity's legal nature, such as being incorporated or unincorporated, or whether it has independent juridical personality, affects the determination of its entitlement to sovereign immunity from suit.

• A corporation incorporated under the Philippine Corporation Code has the power and capacity to sue and be sued in its corporate name.

• Foreign laws on a particular subject are presumed to be the same as those of the Philippines in the absence of evidence to the contrary.

• To invoke state immunity from suit, a foreign entity must prove such immunity according to the principles of public international law. This may involve requesting the Foreign Office of the state where it is sued to convey to the court that the defendant is entitled to immunity, or following a similar procedure such as the process of "suggestion" in the United States or certification from the Foreign Office in England.

• In order for a foreign government or international organization to claim sovereign or diplomatic immunity, an executive endorsement of the claim must be secured from the Philippine Department of Foreign Affairs.

• The certification or endorsement from the Department of Foreign Affairs provides a factual basis for the claim of immunity and creates a disputable evidentiary presumption that the foreign party is immune.

• The endorsement by the Department of Foreign Affairs is necessary and cannot be substituted by the endorsement of the Solicitor General.

• Failure to obtain the necessary certification or endorsement, as well as failure to properly appeal a decision, can result in the dismissal of a complaint and the finality of the decision.

• State immunity from suit is conditional on its withholding of consent.

• The laws and circumstances pertaining to the creation and legal personality of an instrumentality or agency invoking immunity are relevant in determining the applicability of state immunity from suit.

• Consent to be sued can be conferred by the statute or general law creating the instrumentality or agency.