REPUBLIC OF INDONESIA v.

VINZON
G.R. No. 154705 | June 26, 2003

FACTS:
 Republic of Indonesia represented by its Counsellor entered into a Maintenance Agreement
with James Vinzon, a sole proprietor of Vinzon Trade and Service . Vinzon is to provide
maintenance services for the air conditioning units, generators sets, electrical facilities, water
heaters, and water motor pumps for a period of 3 years renewable automatically unless cancelled
by either party 30 days prior to date of expiration
 Prior to the expiration on August 1999, petitioner informed Vinzon that renewal of agreement will
be at the discretion of incoming Chief of Administration (Minister Counsellor Azhari Kasim) who
will assume position in March 2000. Petitioner terminated the Maintenance Agreement on
August 31, 2000 because Kasim was unsatisfied with the services.
 Respondent claimed termination and arbitrary and that there are various circumstances which
negated petitioners dissatisfaction (such as requesting more workers in the embassy etc.)
 Respondent cited a provision in the Maintenance Agreement:
“Any legal action arising out of this Maintenance Agreement shall be settled according to
the laws of the Philippines and by the proper court of Makati City, Philippines”
 Vinzon filed a complaint. Indonesia said that they have sovereign immunity from suit. Vinzon
said that because of the provision in the Maintenance Agreement, Indonesia expressly waived his
immunity from suit. Trial court and CA ruled in favor of Vinzon.

ISSUE:
1. W/N CA erred in sustaining the trial court’s decision that petitioners have waived their immunity
from suit from the provision in the Maintenance Agreement
2. W/N Ambassador Soeratmin (resident ambassador in the embassy) and Minister Counsellor
Kasim may be sued in their private capacities

HELD and RATIO:

1. Yes. Petitioners have not waived their immunity from suit. Hence, Republic of Indonesia cannot
be sued
 Immunity from suit of foreign states is derived in the principle of maxim par in parem
non habet imperium: All states are sovereign equals and cannot assert jurisdiction over
one another.
 Immunity of sovereign is recognized only with regard to public acts (jure imperii) and not
with regard to private acts (jure gestionis)
  Example of jure imperii: public bidding for repair of a wharf at a US Naval
Station (US v. Ruiz)
 Example of jure gestionis: hiring of a cook in the recreation center catering to
American servicemen and to the general public at John Hay Air Station, Baguio
(US v. Rodrigo); and bidding for operation of barber shops in Clark Air Base,
Angeles City
 The existence of a provision in the Maintenance Agreement does not necessarily imply a
waiver of sovereign immunity of suit. Applicability of Philippine laws must be deemed to
include Philippine laws in its totality (i.e. including provisions on immunity). The nature
of the activity or transaction must be tested. The establishment of a diplomatic mission
(embassy) including the maintenance and its upkeep are acts of jure imperii because a
sovereign State does not merely establish a diplomatic mission and leave it unmaintained.
Hence, the contract entered into with Vinzon for the maintenance of the diplomatic
mission is considered a jus imperii.
2. No they cannot be sued in their private capacities because they are diplomatic agents
 Article 31 of the Vienna Convention on Diplomatic Relations provides that diplomatic
agents shall enjoy immunity from criminal jurisdiction in the receiving state (ex:
Philippines). They shall also enjoy immunity from civil and administrative jurisdiction
except:
o Real action relating private immovable property in the territory of receiving
State, unless he holds it on behalf of the sending state (ex: Indonesia)
o Action relating to succession in which diplomatic agent is executor,
administrator, or heir or legatee as a private person and not on behalf of sending
state
o Action relating to professional or commercial activity outside his official function
 Soeratmin and Kasim are not covered by the exceptions, hence they enjoy immunity from
suit

RULING:
Petition is granted