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  • PCGG V Sandiganbayan 2007

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    Jacinth DelosSantos DelaCerna
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    The Sandiganbayan denied a motion to dismiss a civil case filed by Officeco against the PCGG and OSG regarding the freezing of Officeco's bank accounts in Switzerland. The petitioner claimed this violated the act of state doctrine. The Supreme Court held that the act of state doctrine does not apply because the Sandiganbayan would not be examining or reviewing the freeze orders issued by Swiss officials, but rather the propriety of the PCGG's position regarding Officeco's accounts. International law does not require strict application of the act of state doctrine. The classic definition of the act of state doctrine is that courts will not sit in judgment of acts of foreign governments done within their own territory.

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    Political Law

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    PCGG v Sandiganbayan 2007

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    The Sandiganbayan denied a motion to dismiss a civil case filed by Officeco against the PCGG and OSG regarding the freezing of Officeco's bank accounts in Switzerland. The petitioner claimed this violated the act of state doctrine. The Supreme Court held that the act of state doctrine does not apply because the Sandiganbayan would not be examining or reviewing the freeze orders issued by Swiss officials, but rather the propriety of the PCGG's position regarding Officeco's accounts. International law does not require strict application of the act of state doctrine. The classic definition of the act of state doctrine is that courts will not sit in judgment of acts of foreign governments done within their own territory.

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    © All Rights Reserved
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    494 views3 pages

    PCGG V Sandiganbayan 2007

    Uploaded by

    Jacinth DelosSantos DelaCerna
    The Sandiganbayan denied a motion to dismiss a civil case filed by Officeco against the PCGG and OSG regarding the freezing of Officeco's bank accounts in Switzerland. The petitioner claimed this violated the act of state doctrine. The Supreme Court held that the act of state doctrine does not apply because the Sandiganbayan would not be examining or reviewing the freeze orders issued by Swiss officials, but rather the propriety of the PCGG's position regarding Officeco's accounts. International law does not require strict application of the act of state doctrine. The classic definition of the act of state doctrine is that courts will not sit in judgment of acts of foreign governments done within their own territory.

    Copyright:

    © All Rights Reserved
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    of 3

    PCGG vs Sandiganbayan

    GR No. 124772 August 14, 2007

    Facts:
    On 7 April 1986, in connection with criminal proceedings initiated in the Philippines to
    locate, sequester and seek restitution of alleged ill-gotten wealth amassed by the Marcoses and
    other accused from the Philippine Government, the Office of the Solicitor General (OSG) wrote
    the Federal Office for Police Matters in Berne, Switzerland, requesting assistance for the latter
    office to: (a) ascertain and provide the OSG with information as to where and in which cantons
    the ill-gotten fortune of the Marcoses and other accused are located, the names of the
    depositors and the banks and the amounts involved; and (b) take necessary precautionary
    measures, such as sequestration, to freeze the assets in order to preserve their existing value
    and prevent any further transfer thereof (herein referred as the IMAC request).
    On 29 May 1986, the Office of the District Attorney in Zurich, pursuant to the OSGs
    request, issued an Order directing the Swiss Banks in Zurich to freeze the accounts of the
    accused in PCGG I.S. No. 1 and in the List of Companies and Foundations. In compliance
    with said Order, Bankers Trust A.G. (BTAG) of Zurich froze the accounts of Officeco Holdings,
    N.V. (Officeco).
    Officeco appealed the Order of the District Attorney to the Attorney General of the
    Canton of Zurich. The Attorney General affirmed the Order of the District Attorney. Officeco
    further appealed to the Swiss Federal Court which likewise dismissed the appeal on 31 May
    1989.
    Officeco made representations with the OSG and the PCGG for them to officially advise
    the Swiss Federal Office for Police Matters to unfreeze Officecos assets. The PCGG required
    Officeco to present countervailing evidence to support its request, but instead of complying with
    the PCGG requirement for it to submit countervailing evidence, Officeco filed the complaint with
    the SB praying for the PCGG and the OSG to officially advise the Swiss government to exclude
    from the freeze or sequestration order the account of Officeco with BTAG and to unconditionally
    release the said account to Officeco.
    A motion to dismiss was filed but it was denied hence, a petition was brought to the SC
    claiming that the civil action in effect seeks a judicial review of the legality or illegality of the acts
    of the Swiss government since the Sandiganbayan would inevitably examine and review the
    freeze orders of Swiss officials in resolving the case. This would be in violation of the act of
    state doctrine which states that courts of one country will not sit in judgment on the acts of the
    government of another in due deference to the independence of sovereignty of every sovereign
    state.

    Furthermore, if the Sandiganbayan allowed the complaint to prosper, this would place
    the Philippine government in an uncompromising position as it would be constrained to take a
    position contrary to that contained in the IMAC request.

    Is the contention correct?


    Issue:
    W/N Sandiganbayan acted with grave abuse od discretion in denying pertitioners motion to
    dismiss?
    Held:
    No. The parameters of the use of the act of state doctrine were clarified in Banco
    Nacional de Cuba v. Sabbatino, 376 U.S. 398; 84 S. Ct. 923 (1964). There, the U.S. Supreme
    Court held that international law does not require the application of this doctrine nor does it
    forbid the application of the rule even if it is claimed that the act of state in question violated
    international law. moreover, due to the doctrines peculiar nation-to-nation character, in practice
    the usual method for an individual to seek relief is to exhaust local remedies and then repair to
    the executive authorities of his own state to persuade them to champion his claim in diplomacy
    or before an international tribunal.
    Even assuming that international law requires the application of the act of state doctrine,
    it bears stressing that the Sandiganbayan will not examine and review the freeze orders of the
    concerned Swiss officials in Civil Case No. 0164. The Sandiganbayan will not require the Swiss
    officials to submit to its adjudication nor will it settle a dispute involving said officials. In fact, as
    prayed for in the complaint, the Sandiganbayan will only review and examine the propriety of
    maintaining PCGGs position with respect to Officecos accounts with BTAG for the purpose of
    further determining the propriety of issuing a writ against the PCGG and the OSG. Everything
    considered, the act of state doctrine finds no application in this case and petitioners resort to it
    is utterly mislaid. (PCGG, et al. v. SB, et al., G.R. No. 124772, August 14, 2007, Tinga, J).
    The classic American statement of the act of state doctrine, which appears to have taken
    root in England as early as 1674 (Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 84 S.
    Ct. 923 (1964), citing Blad v. Bamfield, 3 Swans. 604, 36 Eng. Rep. 992), and began to emerge
    in American jurisprudence in the late eighteenth and early nineteenth centuries, is found in
    Underhill v. Hernandez, 168 U.S. 250, 18 S. Ct. 83, 42 L. Ed. 456 (1897), where Chief Justice
    Fuller said for a unanimous Court:
    Every sovereign state is bound to respect the independence of every other state,
    and the courts of one country will not sit in judgment on the acts of the government of
    another, done within its territory, redress of grievances by reason of such acts must be
    obtained through the means open to be availed of by sovereign powers as between
    themselves. (Banco Nacional de Cuba v. Sabbatino, 376 U.S. 398, 84 S. Ct. 923 (1964),
    citing Underhill v. Hernandez, 168 U.S. 250, 18 S. Ct. 83, 42 L. Ed. 456 (1897)).
    The act of state doctrine is one of the methods by which States prevent their national
    courts from deciding disputes which relate to the internal affairs of another State, the other two
    being immunity and non-justiciability. (EVANS, M.D. (ED.), International Law (First Edition),
    Oxford University Press, p. 357). It is an avoidance technique that is directly related to a States
    obligation to respect the independence and equality of other States by not requiring them to
    submit to adjudication in a national court or to settlement of their disputes without their consent.
    It requires the forum court to exercise restraint in the adjudication of disputes relating to

    legislative or other governmental acts which a foreign State has performed within its territorial
    limits.

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