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  • (GR No. 179918, Sep 08, 2010) Shell Philippines Exploration B.V. V. Efren Jalos

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    Chi Koy
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    This case discusses whether Shell Philippines Exploration B.V. can claim state immunity as an agent of the Philippine government in a suit filed by fishermen alleging that Shell's natural gas pipeline operations drove fish away from coastal areas, damaging their livelihoods. The Supreme Court ruled that Shell cannot invoke state immunity because it is a service contractor, not an agent, for the exploration and development of one of the Philippines' natural gas reserves under its contract. While appointed by the government to conduct petroleum operations, Shell's primary role is to provide services, technology, and financing, not to represent the government in business dealings. Therefore, Shell can be sued for damages without the state's consent.

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    Political law, Consti 1

    Original Title

    Shell Philippines v Jalos

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    This case discusses whether Shell Philippines Exploration B.V. can claim state immunity as an agent of the Philippine government in a suit filed by fishermen alleging that Shell's natural gas pipeline operations drove fish away from coastal areas, damaging their livelihoods. The Supreme Court ruled that Shell cannot invoke state immunity because it is a service contractor, not an agent, for the exploration and development of one of the Philippines' natural gas reserves under its contract. While appointed by the government to conduct petroleum operations, Shell's primary role is to provide services, technology, and financing, not to represent the government in business dealings. Therefore, Shell can be sued for damages without the state's consent.

    Copyright:

    © All Rights Reserved
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    227 views1 page

    (GR No. 179918, Sep 08, 2010) Shell Philippines Exploration B.V. V. Efren Jalos

    Uploaded by

    Chi Koy
    This case discusses whether Shell Philippines Exploration B.V. can claim state immunity as an agent of the Philippine government in a suit filed by fishermen alleging that Shell's natural gas pipeline operations drove fish away from coastal areas, damaging their livelihoods. The Supreme Court ruled that Shell cannot invoke state immunity because it is a service contractor, not an agent, for the exploration and development of one of the Philippines' natural gas reserves under its contract. While appointed by the government to conduct petroleum operations, Shell's primary role is to provide services, technology, and financing, not to represent the government in business dealings. Therefore, Shell can be sued for damages without the state's consent.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    [ GR No.

    179918, Sep 08, 2010 ]


    SHELL PHILIPPINES EXPLORATION B.V. v. EFREN JALOS

    This case is about a question of jurisdiction over an action against a petroleum contractor, whose pipeline operation has
    allegedly driven the fish away from coastal areas, inflicting loss of earnings among fishermen.

    FACTS:

    Petitioner Shell Philippines Exploration B.V. and the Republic of the Philippines entered into Service Contract 38 for
    the exploration and extraction of petroleum in northwestern Palawan. Two years later, Shell discovered natural gas in the
    Camago-Malampaya area and pursued its development of the well under the Malampaya Natural Gas Project. This
    entailed the construction and installation of a pipeline, which spanned 504 kms. and crossed the Oriental Mindoro Sea,
    from Shell’s production platform to its gas processing plant in Batangas.

    On May 19, 2003, respondents Jalos and 77 other individuals, claiming that they were all subsistence fishermen
    from the coastal barangay of Bansud, Oriental Mindoro, filed a complaint for damages against Shell on the ground that
    their livelihood was adversely affected by the construction and operation of Shell’s natural gas pipeline.

    Shell moved for dismissal of the complaint alleging that the Pollution Adjudication Board (PAB), and not the trial
    court, has primary jurisdiction over pollution cases and actions for related damages and that it could not be sued pursuant
    to the doctrine of state immunity without the State’s consent on the basis that it merely serves as an agent of the
    Philippine government in the development of the Malampaya gas reserves through Service Contract 38.

    The RTC dismissed the complaint ruling that it should be brought first to the PAB. CA reversed RTC’s order upon
    respondent’s petition for certiorari. Shell moved for reconsideration of the CA’s decision but the same was denied. Hence,
    Shell filed this petition for review.

    ISSUE:

    Can Shell invoke state immunity, as agent of the Republic of the Philippines?

    RULING:

    No. Shell cannot invoke state immunity because it is not an agent of the Republic of the Philippines. It is just a
    service contractor for the exploration and development of one of the country’s natural gas reserves. While the Republic
    appointed Shell as the exclusive party to conduct petroleum operations in the Camago-Malampayo area under the State’s
    full control and supervision, it does not follow that Shell has become the State’s “agent” within the meaning of the law.

    ((An agent is a person who binds himself to render some service or to do something in representation or on behalf of
    another, with the consent or authority of the latter. The Essence of an agency is the agent’s ability to represent his
    principal and bring about business relations between the latter and third persons.))

    Shell’s primary obligation under the Service Contract 38 is not to represent the Philippine government for the
    purpose of transacting business with third persons. Rather, its contractual commitment is to develop and manage
    petroleum operations on behalf of the state.

    Hence, Shell is not an agent of the Philippine government but a provider of services, technology and financing for the
    Malampaya Natural Gas Project; it is not immune from suit and it may be sued for claims even without the State’s
    consent. The Phil. Government recognized that Shell could be sued in relation to the project.

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