WALTER UPRIGHT, PLAINTIFF, v. MERCURY BUSINESS MACHINES CO., INC.

,
DEFENDANT
This is an action brought by a plaintiff assignee on a trade acceptance drawn by its assignor on itself
and accepted by defendant, representing a balance due for machinery sold to defendant. The
complaint alleges that the assignor was a corporation organized and existing under the laws of West
Germany, having its principal place of business in West Berlin, Republic of West Germany. The
motion at bar seeks an order under subdivisions 1 and 2 of rule 107 of the Rules of Civil Practice
dismissing the complaint on the grounds that the court does not have jurisdiction of the subject
matter of the action and/or plaintiff does not have legal capacity to sue.

The basis of the motion is a contention that the plaintiff’s assignor is a State-controlled enterprise
of the German Democratic Republic. In support thereof, the defendant submits a copy of a
communication from the Chief of the Economic Affairs section of the United States Mission in
Berlin to the Department of State. Plaintiff’s affidavits in opposition state that it has been advised
by its assignor that it was founded by residents of the German Democratic Republic under the
Limited Liabilities Company Law of 1892 and its founding is permitted in the German Democratic
Republic; that it has no office in West Berlin but has concluded contracts with firms in that city
and in West Germany; that the negotiations with defendant were carried on in West Germany.
The matter was sent to an Official Referee to hear and report with his recommendation on this
issue.

It has now been conceded that the said assignor was not a West German corporation but rather an
East German corporation. Upon such concession the court cannot recognize the existence of a
juridical creature of a government we do not recognize. The court will take judicial notice that the
German Democratic Republic is not recognized by our Government. However, even though
plaintiff’s assignor would have no right to sue in this court as a corporation since the recognition of
that legal entity is barred by the foreign policy of the United States Government, nevertheless it
cannot be denied that some organization or group of persons does exist and entered into a
commercial transaction with the defendant. If it were clear that this group of people consisted of
private citizens unconnected with the unrecognized government, the court is of the opinion that no
further question would exist. The foreign policy of the United States Government does not require
us to deny that there are people residing in and doing business in a certain geographical area. No
prohibition or restriction seems to have been imposed on trading in the items which are the basis
of this cause of action. Where, as here, it has received the benefits of the commercial transaction, it
would be inequitable to permit defendant to retain the fruits thereof without compensation. The
point made by defendant that it would not be able to enforce a proposed counterclaim against
plaintiff’s assignor in an East German court is not well taken. It does have an opportunity to press
any claim it may deem advisable in connection with the subject transaction in this court.

However, overriding foreign policy considerations may make necessary a denial of access to our
courts in the event it is determined that the defendant dealt in some form with the unrecognized
Government of the German Democratic Republic.

If plaintiff’s assignor is as a matter of fact wholly owned by the so-called German Democratic
Republic, it would, by that fact, have no capacity to sue in our court, regardless of its organization.
Whether this be so still remains to be determined, since the proof submitted on this issue is
inconclusive.

Plaintiff’s contention that a claim of incapacity to sue cannot be set up against him, despite the
refusal of recognition, in that he is an American citizen and a resident of the State of New York, is
without merit. He can have no greater rights than his assignor.
The subject matter of the contentions urged in support of dismissal under both subdivisions 1 and
2 of rule 107 of the Rules of Civil Practice appears to be identical. It is not that the court does not
have jurisdiction of the subject matter, but the question is whether the assignor has capacity to sue
and the court will entertain the action.

It appears from defendant’s letter of December 9, 1959, that the sole issue tendered to the Official
Referee was the state of organization of the assignor corporation. It is now agreed that it is an East
German corporation. Accordingly, the motion to dismiss is denied with leave to defendant to raise
the matter by defense in its answer, unless the parties agree to a prior trial of the issues as herein
stated, in which event an order will be settled.

Disposition
Accordingly, the motion to dismiss is denied with leave to defendant to raise the matter by defense
in its answer, unless the parties agree to a prior trial of the issues as herein stated, in which event an
order will be settled.
Legality of the Threat or Use of Nuclear Weapon (Advisory Opinion)
Brief Fact Summary. An advisory opinion as to whether states are permitted to use nuclear
weapons under international law was placed before the International Court of Justice by the U.N.
General Assembly.
Synopsis of Rule of Law. Under certain circumstance, threat or use of nuclear weapons is
permitted under international law.
Facts. A request for an advisory opinion as to whether states are permitted to use nuclear weapons
under international law was laid on the table of the International Court of Justice by the U.N.
General Assembly.
Issue. Under certain circumstances, are threats or use of nuclear weapons permitted under
international law?
Held. Yes. Under certain circumstance, threat or use of nuclear weapons are permitted under
international law. The threat or use of nuclear weapons in all circumstances is not authorized or
prohibited by either the customary or conventional international nuclear law.
Under the U.N. Charter, the threat or use of nuclear weapons would be considered legal if all
requirements of Article 51 which deals with state’s rights to self-defense are met. However, in
whatever the situation can be, a state obligation exists to pursue in good faith and bring to a
conclusion negotiations leading to nuclear disarmament in all its aspect under strict and effective
international control.
Discussion. The idea that despite steps taken by a very large part of the international community
towards complete nuclear disarmament, in which no customary rule specifically proscribe the
threat or use of nuclear weapons that exists is illustrated by this case. Reservations about the notion
that there are no imaginable circumstances warranting their use have been expressed by too many
dissenters.
International Catholic Migration Commission vs. Calleja, GR No. 85750 September 28, 1990
FACTS:
GR # 85750- the Catholic Migration Commission (ICMC) case.
ICMC was one of those accredited by the Philippine government to operate the refugee processing
center in Morong, Bataan. That comes from an argument between the Philippine government and
the United Nations High Commissioner for refugees for eventual resettlement to other countries
was to be established in Bataan.
ICMC was duly registered with the United Nations Economic and Social Council and enjoys
consultative status. As an international organization rendering voluntary and humanitarian services
in the Philippines, its activities are parallel to those of the international committee for migration
and the international of the Red Cross.
On July 14, 1986, Trade Unions of the Philippines and Allied for certification with the then
Ministry of Labor and Employment a petition for certification election among the rank and file
members employed by ICMC. The latter opposed the petition on the ground that it is an
international organization registered with the United Nations and hence, enjoys diplomatic
immunity.
The Med-Arbiter sustained ICMC and dismissed the petition for each of jurisdiction. On appeal
by TUPAS, Director Calleja, reversed the Med-arbiter’s decision and ordered the immediate
conduct of a certification election. ICMC then sought the immediate dismissal of the TUPAS
petition for certification election involving the immunity expressly granted but the same was
denied. With intervention of department of foreign affairs who was legal interest in the outcome of
this case, the second division gave due to the ICMC petition and required the submittal of
memoranda by the parties.

GR # 89331- the IRRI case

The International Rice Research Institute was a fruit of memorandum of understanding between
the Philippine government and the Ford and Rochefeller Foundations. It was intended to be an
autonomous, philanthropic tax-free, non-profit, non stock organization designed to carry out the
principal objective of conducting “ basic research on the rice plant.”
It was organized and registered with the SEC as a private corporation subject to all laws and
regulations. However, by virtue of P.D no. 1620, IRRI was granted the status, prerogatives,
privileges and immunities of an international organization.
The Kapisanan filed a petition for direct certification election with regional office of the
Department of Labor and Employment. IRRI opposed the petition invoking Pres. Decree
no.1620 conferring upon it the status of an international organization and granting it immunity
from all civil, criminal, and administrative proceedings under Philippine laws. The Med-Arbiter
upheld the opposition on the basis of PD 1620 and dismissed the petition for direct certification.
On appeal by BLR Director, set aside the med-arbiter’s decision and contends that immunities
and privileges granted to IRRI do not include exemption from coverage of our labor laws.
ISSUES:
GR # 85750- the ICMC case:
Whether or not the grant of diplomatic privileges and immunities to ICMC extends to immunity
from the application of Philippine labor laws.
GR no. 89331- the IRRI case:
Whether or not the Secretary of Labor committed grave abuse of discretion in dismissing the
petition for certification election filed by Kapisanan.
RULING:
The grant of diplomatic privileges and immunities to ICMC extends to immunity from the
application of Philippine labor laws, because it is clearly necessitated by their international
character and respective purposes which is to avoid the danger of partiality and interference by the
host country in their internal workings.
Employees are not without recourse whenever there are disputes to be settled because each
specialized agency shall make provision for appropriate modes of settlement of disputes out of
contracts or other disputes of private character to which the specialized agency is a party.
Moreover, pursuant to article IV of memorandum of abuse of privilege by ICMC, the government
is free to withdraw the privileges and immunities accorded.
No grave abuse of discretion may be imputed to respondent secretary of labor in his assumption of
appelate jurisdiction, contrary to Kapisanan’s allegation, hence, any party to an election may appeal
the order or results of the elections as determined by the med-arbiter directly to the secretary of
labor and employment on the ground that the rules and regulations or parts thereof established by
the secretary of labor and employment for the conduct of the election have been violated.
Wherefore, petition granted in ICMC case and in IRRI case, the petition was dismissed.
DFA vs NLRC Case Digest
Facts:
On 27 January 1993, private respondent Magnayi filed an illegal dismissal case against Asian
Development Bank. Two summonses were served, one sent directly to the ADB and the other
through the Department of Foreign Affairs. ADB and the DFA notified respondent Labor Arbiter
that the ADB, as well as its President and Officers, were covered by an immunity from legal
process except for borrowings, guaranties or the sale of securities pursuant to Article 50(1) and
Article 55 of the Agreement Establishing the Asian Development Bank (the "Charter") in relation
to Section 5 and Section 44 of the Agreement Between The Bank and The Government Of The
Philippines Regarding The Bank's Headquarters (the "Headquarters Agreement").
The Labor Arbiter took cognizance of the complaint on the impression that the ADB had waived
its diplomatic immunity from suit and, in time, rendered a decision in favor Magnayi. The ADB
did not appeal the decision. Instead, on 03 November 1993, the DFA referred the matter to the
NLRC; in its referral, the DFA sought a "formal vacation of the void judgment." When DFA failed
to obtain a favorable decision from the NLRC, it filed a petition for certiorari.
Issues:
1. Whether or not ADB is immune from suit
2. Whether or not by entering into service contracts with different private companies, ADB has descended
to the level of an ordinary party to a commercial transaction giving rise to a waiver of its immunity from suit
3. Whether or not the DFA has the legal standing to file the present petition
4. Whether or not the extraordinary remedy of certiorari is proper in this case

Held:
1. Under the Charter and Headquarters Agreement, the ADB enjoys immunity from legal process
of every form, except in the specified cases of borrowing and guarantee operations, as well as the
purchase, sale and underwriting of securities. The Bank’s officers, on their part, enjoy immunity in
respect of all acts performed by them in their official capacity. The Charter and the Headquarters
Agreement granting these immunities and privileges are treaty covenants and commitments
voluntarily assumed by the Philippine government which must be respected.
Being an international organization that has been extended a diplomatic status, the ADB is
independent of the municipal law. "One of the basic immunities of an international organization is
immunity from local jurisdiction, i.e., that it is immune from the legal writs and processes issued by
the tribunals of the country where it is found. The obvious reason for this is that the subjection of
such an organization to the authority of the local courts would afford a convenient medium thru
which the host government may interfere in their operations or even influence or control its
policies and decisions of the organization; besides, such subjection to local jurisdiction would
impair the capacity of such body to discharge its responsibilities impartially on behalf of its
member-states."
2. No. The ADB didn't descend to the level of an ordinary party to a commercial transaction,
which should have constituted a waiver of its immunity from suit, by entering into service contracts
with different private companies. “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 act or acts jure gestionis.
“Certainly, the mere entering into a contract by a foreign state with a private party cannot be the
ultimate test. Such an act can only be the start of the inquiry. The logical question is whether the
foreign state is engaged in the activity in the regular course of business. If the foreign state is not
engaged regularly in a business or trade, the particular act or transaction must then be tested by its
nature. If the act is in pursuit of a sovereign activity, or an incident thereof, then it is an act jure
imperii, especially when it is not undertaken for gain or profit.”
The service contracts referred to by private respondent have not been intended by the ADB for
profit or gain but are official acts over which a waiver of immunity would not attach.
3. Yes. The DFA's function includes, among its other mandates, the determination of persons and
institutions covered by diplomatic immunities, a determination which, when challenged, 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 on the DFA as being the highest executive department with the
competence and authority to so act in this aspect of the international arena. In Holy See vs. Hon.
Rosario, Jr., this Court has explained the matter in good detail; viz:
"In Public International Law, when a state or international agency wishes to plead sovereign or
diplomatic immunity in a foreign court, it requests the Foreign Office of the state where it is sued
to convey to the court that said defendant is entitled to immunity.
"In the United States, the procedure followed is the process of 'suggestion,' where the foreign state
or the international organization sued in an American court requests the Secretary of State to make
a determination as to whether it is entitled to immunity. If the Secretary of State finds that the
defendant is immune from suit, he, in turn, asks the Attorney General to submit to the court a
'suggestion' that the defendant is entitled to immunity.
"In the Philippines, the practice is for the foreign government or the international organization to
first secure an executive endorsement of its claim of sovereign or diplomatic immunity. But how
the Philippine Foreign Office conveys its endorsement to the courts varies. In International
Catholic Migration Commission vs. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs
just sent a letter directly to the Secretary of Labor and Employment, informing the latter that the
respondent-employer could not be sued because it enjoyed diplomatic immunity. In World
Health Organization vs. Aquino, 48 SCRA 242 (1972), the Secretary of Foreign Affairs sent the
trial court a telegram to that effect. In Baer vs. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked
the Secretary of Foreign Affairs to request the Solicitor General to make, in behalf of the
Commander of the United States Naval Base at Olongapo City, Zambales, a 'suggestion' to
respondent Judge. The Solicitor General embodied the 'suggestion' in a manifestation and
memorandum as amicus curiae.
"In the case at bench, the Department of Foreign Affairs, through the Office of Legal Affairs
moved with this Court to be allowed to intervene on the side of petitioner. The Court allowed the
said Department to file its memorandum in support of petitioner's claim of sovereign immunity.
"In some cases, the defense of sovereign immunity was submitted directly to the local courts by the
respondents through their private counsels. In cases where the foreign states bypass the Foreign
Office, the courts can inquire into the facts and make their own determination as to the nature of
the acts and transactions involved."
4. Yes. Relative to the propriety of the extraordinary remedy of certiorari, the Court has, under
special circumstances, so allowed and entertained such a petition when (a) the questioned order or
decision is issued in excess of or without jurisdiction, or (b) where the order or decision is a patent
nullity, which, verily, are the circumstances that can be said to obtain in the present case. When an
adjudicator is devoid of jurisdiction on a matter before him, his action that assumes otherwise
would be a clear nullity.
Petition for certiorari is GRANTED, and the decision of the Labor Arbiter, dated 31 August 1993
is VACATED for being NULL AND VOID. (DFA vs NLRC, G.R. No. 113191, 18 September
1996)
WHO vs Aquino Case Digest
Facts:
Dr. Leonce Verstuyft was assigned by WHO to its regional office in Manila as Acting Assistant
Director of Health Services. His personal effects, contained in twelve (12) crates, were allowed free
entry from duties and taxes. Constabulary Offshore Action Center (COSAC) suspected that the
crates “contain large quantities of highly dutiable goods” beyond the official needs of Verstuyft.
Upon application of the COSAC officers, Judge Aquino issued a search warrant for the search and
seizure of the personal effects of Verstuyft.
Secretary of Foreign Affairs Carlos P. Romulo advised Judge Aquino that Dr. Verstuyft is entitled
to immunity from search in respect for his personal baggage as accorded to members of diplomatic
missions pursuant to the Host Agreement and requested that the search warrant be suspended.
The Solicitor General accordingly joined Verstuyft for the quashal of the search warrant but
respondent judge nevertheless summarily denied the quashal. Verstuyft, thus, filed a petition for
certiorari and prohibition with the SC. WHO joined Verstuyft in asserting diplomatic immunity.
Issue:
Whether or not personal effect of Verstuyft can be exempted from search and seizure under the
diplomatic immunity.
Held:
Yes. The executive branch of the Phils has expressly recognized that Verstuyft is entitled to
diplomatic immunity, pursuant to the provisions of the Host Agreement. The DFA formally
advised respondent judge of the Philippine Government's official position. The Solicitor General,
as principal law officer of the government, likewise expressly affirmed said petitioner's right to
diplomatic immunity and asked for the quashal of the search warrant.
It is a recognized principle of international law and under our system of separation of powers that
diplomatic immunity is essentially a political question and courts should refuse to look beyond a
determination by the executive branch of the government, and where the plea of diplomatic
immunity is recognized and affirmed by the executive branch of the government as in the case at
bar, it is then the duty of the courts to accept the claim of immunity upon appropriate suggestion
by the principal law officer of the government, the Solicitor General in this case, or other officer
acting under his discretion. Courts may not so exercise their jurisdiction by seizure and detention
of property, as to embarrass the executive arm of the government in conducting foreign relations.
The Court, therefore, holds the respondent judge acted without jurisdiction and with grave abuse
of discretion in not ordering the quashal of the search warrant issued by him in disregard of the
diplomatic immunity of petitioner Verstuyft. (World Health Organization vs. Aquino, G.R. No. L-
35131, November 29, 1972, 48 SCRA 243)
G.R. No. 101949 238 SCRA 524 December 1, 1994
Petitioner: The Holy See
Respondent: Hon. Elidberto Rosario, Jr., in his capacity as Presiding Judge of
RTC Makati, Branch 61 and Starbright Sales Enterprises, Inc.

FACTS: Petition arose from a controversy over a parcel of land. Lot 5-A, registered under the
name Holy See, was contiguous to Lot 5-B and 5-D under the name of Philippine Realty
Corporation (PRC). The land was donated by the Archdiocese of Manila to the Papal Nuncio,
which represents the Holy See, who exercises sovereignty over the Vatican City, Rome, Italy, for
his residence.
Said lots were sold through an agent to Ramon Licup who assigned his rights to respondents
Starbright Sales Enterprises, Inc.
When the squatters refuse to vacate the lots, a dispute arose between the two parties because both
were unsure whose responsibility was it to evict the squatters from said lots. Respondent Starbright
Sales Enterprises Inc. insists that Holy See should clear the property while Holy See says that
respondent corporation should do it or the earnest money will be returned. With this, Msgr.
Cirilios, the agent, subsequently returned the P100,000 earnest money.
The same lots were then sold to Tropicana Properties and Development Corporation.
Starbright Sales Enterprises, Inc. filed a suit for annulment of the sale, specific performance and
damages against Msgr. Cirilios, PRC as well as Tropicana Properties and Development
Corporation. The Holy See and Msgr. Cirilos moved to dismiss the petition for lack of jurisdiction
based on sovereign immunity from suit. RTC denied the motion on ground that petitioner already
"shed off" its sovereign immunity by entering into a business contract. The subsequent Motion for
Reconsideration was also denied hence this special civil action for certiorari was forwarded to the
Supreme Court.
ISSUE: Whether or not Holy See can invoke sovereign immunity.
HELD: The Court held that Holy See may properly invoke sovereign immunity for its non-
suability. As expressed in Sec. 2 Art II of the 1987 Constitution, generally accepted principles of
International Law are adopted by our Courts and thus shall form part of the laws of the land as a
condition and consequence of our admission in the society of nations.
It was noted in Article 31(A) of the 1961 Vienna Convention on Diplomatic Relations that
diplomatic envoy shall be granted immunity from civil and administrative jurisdiction of the
receiving state over any real action relating to private immovable property. The Department of
Foreign Affairs (DFA) certified that the Embassy of the Holy See is a duly accredited diplomatic
missionary to the Republic of the Philippines and is thus exempted from local jurisdiction and is
entitled to the immunity rights of a diplomatic mission or embassy in this Court.
Furthermore, it shall be understood that in the case at bar, the petitioner has bought and sold lands
in the ordinary course of real estate business, surely, the said transaction can be categorized as an
act jure gestionis. However, petitioner has denied that the acquisition and subsequent disposal of
the lot were made for profit but claimed that it acquired said property for the site of its mission or
the Apostolic Nunciature in the Philippines.
The Holy See is immune from suit because the act of selling the lot of concern is non-propriety in
nature. The lot was acquired through a donation from the Archdiocese of Manila, not for a
commercial purpose, but for the use of petitioner to construct the official place of residence of the
Papal Nuncio thereof. The transfer of the property and its subsequent disposal are likewise clothed
with a governmental (non-proprietal) character as petitioner sold the lot not for profit or gain rather
because it merely cannot evict the squatters living in said property.
In view of the foregoing, the petition is hereby GRANTED and the complaints were dismissed
accordingly.
Gabcikovo-Nagymaros Project (Hungary/Slovakia)
Citation. 1997 I.C.J. 7, reprinted in 37 I.L.M. 162 (1998)

Brief Fact Summary. Hungary (P) claimed that Czechoslovakia (D) violated the provisions of a
treaty when it appropriated the waters of the Danube River to construct a dam.
Synopsis of Rule of Law. Watercourse states shall participate in the use, development and
protection of an international watercourse in an equitable and reasonable manner.

Facts. In 1977, Hungary (P) and Czechoslovakia (D) signed a Treaty for the construction of dams
and other projects along the Danube River that bordered both nations. Czechoslovakia (D) began
work on damming the river in its territory when Hungary (P) stopped working on the project and
negotiation could not resolve the matter which led Hungary (P) to terminate the Treaty. Hungary
(P) based its action on the fact that the damming of the river had been agreed to only on the
ground of a joint operation and sharing of benefits associated with the project, to which
Czechoslovakia (D) had unlawfully unilaterally assumed control of a shared resource.

Issue. Shall watercourse states participate in the use, development and protection of an
international watercourse in an equitable and reasonable manner?

Held. Yes. Watercourse states shall participate in the use, development and protection of an
international watercourse in an equitable and reasonable manner. Hungary (P) was deprived of its
rights to an equitable and reasonable share of the natural resources of the Danube by
Czechoslovakia (D) and also failed to respect the proportionality that is required by international
law. Cooperative administration must be reestablished by the parties of what remains of the
project.

Discussion. The Court’s decision was that the joint regime must be restored. In order to achieve
most of the Treaty’s objectives, common utilization of shared water resources was necessary.
Hence, the defendant was not authorized to proceed without the plaintiff’s consent.
Island of Palmas Case (United States v. The Netherlands)
Citation. Perm. Ct. of Arbitration, 2 U.N. Rep. Int’l Arb. Awards 829 (1928).
Brief Fact Summary. Both the United States (P) laid claim to the ownership of the Island of
Palmas. While the U.S. (P) maintained that it was part of the Philippines, the Netherlands (D)
claimed it as their own.
Synopsis of Rule of Law. A title that is inchoate cannot prevail over a definite title found on the
continuous and peaceful display of sovereignty.

Facts. Both the United States (P) laid claim to the ownership of the Island of Palmas. While the
U.S. (P) maintained that it was part of the Philippines, the Netherlands (D) claimed it as their own.
The claim of the U.S. (P) was back up with the fact that the islands had been ceded by Spain by the
Treaty of Paris in 1898, and as successor to the rights of Spain over the Philippines, it based its
claim of title in the first place on discovery. On the part of the Netherlands (D), they claimed to
have possessed and exercised rights of sovereignty over the island from 1677 or earlier to the
present.

Issue. Can a title which is inchoate prevail over a definite title found on the continuous and
peaceful display of sovereignty?

Held. (Huber, Arb.). No. A title that is inchoate cannot prevail over a definite title found on the
continuous and peaceful display of sovereignty. The peaceful and continuous display of territorial
sovereignty is as good as title. However, discovery alone without subsequent act cannot suffice to
prove sovereignty over the island. The territorial sovereignty of the Netherlands (D) was not
contested by anyone from 1700 to 1906. The title of discovery at best an inchoate title does not
therefore prevail over the Netherlands (D) claims of sovereignty.

Discussion. Evidence of contracts made by the East India Company and the Netherlands (D) was
examined by the arbitrator. The claims made by the Netherlands (D) were also based on the
premise of the convention it had with the princes and native chieftains of the islands. Hence, at the
time of the Treaty of Paris in 1898, Spain was found not to have dominion over the island.
y 4,700 private U.S. claims, ordered payment by Iran (D) to U.S. nationals amounting to over $2.5
billion.
Barcelona Traction, Light and Power Company Ltd, (Belgium v. Spain)
Citation. I.C.J. 1970 I.C.J. 3.

Brief Fact Summary. Belgium (P) claimed Spain (D) should be held accountable for the injury to a
Canadian corporation operating in Spain.
Synopsis of Rule of Law. A state assumes an obligation concerning the treatment of foreign
investments based on general international law, once the state admits foreign investments or
foreign nationals into its territory.

Facts. On behalf of Belgian nationals (P) who had invested in a Canadian corporation, Belgium (P)
sued Spain (D) on the premise that Spain (D) was responsible for acts in violation of international
law that had caused injury to the Canadian corporation and its Belgian shareholders (P).

Issue. Does a state assumes an obligation concerning the treatment of foreign investments based
on general international law, once the state admits foreign investments or foreign nationals into its
territory?

Held. Yes. A state assumes an obligation concerning the treatment of foreign investments based on
general international law, once the state admits foreign investments or foreign nationals into its
territory. It is highly imperative to draw a distinction between those obligations of a state toward the
international community as a whole and those arising from the field of diplomatic protection. It is
only the party to whom an international obligation is due can bring a claim if a breach of an
obligation that is the subject of diplomatic protection occurs.

Discussion. The basic right of all human persons was mentioned by the Court to be protected
against slavery and racial discrimination as deriving from basic general international law. Such
rights may derive from international instruments of a universal or quasi-universal character. Such
obligations are obligations erga omnes, that is, all states have a legal interest in their protection.