Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. L-104776 December 5, 1994 B EN!EN DO M. C"D"L N, ROL"NDO M. "MUL, DON"TO B. E!"NGEL ST", #$% &'e re(& o) 1,767 N"MED-COMPL" N"NTS, &'r* #$% b+ &'e,r "&&or$e+-,$-)#c&, "&&+. GER"RDO ". DEL MUNDO, petitioners, vs. P- L PP NE O!ERSE"S EMPLO.MENT "DM N STR"T ON/S "DM N STR"TOR, N"T ON"L L"BOR REL"T ONS COMM SS ON, BRO0N 1 ROOT NTERN"T ON"L, NC. "ND2OR "S " NTERN"T ON"L BU LDERS CORPOR"T ON, respondents. G.R. No(. 104911-14 December 5, 1994 B EN!EN DO M. C"D"L N, ET "L., petitioners, vs. -ON. N"T ON"L L"BOR REL"T ONS COMM SS ON, BRO0N 1 ROOT NTERN"T ON"L, NC. #$%2or "S " NTERN"T ON"L BU LDERS CORPOR"T ON, respondents. G.R. No(. 105039-43 December 5, 1994 "S " NTERN"T ON"L BU LDER CORPOR"T ON #$% BRO0N 1 ROOT NTERN"T ON"L, NC., petitioners, vs. N"T ON"L L"BOR REL"T ONS COMM SS ON, B EN!EN DO M. C"D"L N, ROL"NDO M. "MUL, DON"TO B. E!"NGEL ST", ROMEO P"T"G, R 5"L NO RE.ES, GN"C O DE !ER", SOLOMON B. RE.ES, 6OSE M. "B"N, EM GD O N. "B"R7UE5, "NTON O "CUP"N, ROMEO "CUP"N, BEN6"M N "LE6"NDRE, 0 L8REDO D. "L G"DO, M"RT N "M ST"D, 6R., ROL"NDO B. "MUL, "MORSOLO "N"D NG, "NTON O T. "NGLO, ! CENTE "RL T", -ERBERT ".O, S L!ER O B"L"T"5O, "L8REDO B"LOBO, 8"LCONERO B"N""G, R"MON B"RBOS", 8EL 9 B"RCEN", 8ERN"NDO B"S, M"R O B"T"CL"N, ROBERTO S. B"T C", ENR CO BELEN, "R STEO B COL, L"RR. C. B COL, PETRON LLO B SCOC-O, 8EL 9 M. BOB ER, D ON S O BOBONGO, B"."N S.

BR"C"M"NTE, P"BL TO BUST LLO, GU LLERMO C"BE5"S, B EN!EN DO C"D"L N, RODOL8O C"G"T"N, "M"NTE C" L"O, RENEO C"NDOR, 6OSE C"ST LLO, M"NUEL C"ST LLO, REM"R C"STRO6ERES, RE.N"LDO C"."S, ROMEO CEC L O, TEODULO CREUS, B"."N D".R T, R C"RDO D".R T, ERNESTO T. DEL" CRU5, 8R"NC SCO DE GU5M"N, ONO8RE DE R"M", GN"C O DE !ER", MODESTO D 5ON, RE.N"LDO D 5ON, "NTON O S. DOM NGUE5, G LBERT EBR"D", R C"RDO EBR"D", "NTON O E6ERC TO, 6R., EDU"RTE ER D"O, EL"D O ESCOTOTO, 6O-N ESGUERR", EDU"RDO ESP R TU, ERNESTO ESP R TU, RODOL8O ESP R TU, NESTOR M. ESTE!", BEN6"M N ESTR"D", !"LER O E!"NGEL ST", OL G"R O 8R"NC SCO, 6ESUS G"B"0"N, ROL"NDO G"RC ", "NGEL GUD", P"C TO -ERN"NDE5, "NTON O - L"R O, -ENR. L. 6"COB, -ONESTO 6"RD N "NO, "NTON O 6OCSON, GER"RDO L"CS"M"N", E8REN U. L R O LORETO LONTOC, SR"EL LOREN5O, "LE6"NDRO LOR NO, 6OSE M"B"L"., -ERM E M"R"N"N, LEO! G LDO M"RC "L, NOEL M"RT NE5, D"NTE M"TREO, LUC "NO MELENDE5, REN"TO MELO, 8R"NC S MED OD ", 6OSE C. M L"NES, R".MUNDO C. M L"., CRESENC "NO M R"ND", LDE8ONSO C. MOL N", "RM"NDO B. MONDE6"R RESURRECC ON D. N"5"RENO, 6U"N OL NDO, 8R"NC SCO R. OL !"RES, PEDRO ORB ST", 6R., R C"RDO ORDONE5, ERN E P"NC-O, 6OSE P"NC-O, GORGON O P. P"R"L", MODESTO P NP N, 6U"N TO P"RE", ROMEO . P"T"G, 8R"NC SCO P NP N, LEON"RDO POBLETE, 6" ME POLLOS, DOM NGO POND"L S, EUGEN O R"M RE5, LUC EN M. RESP"LL, G"UDENC O RET"N"N, 6R., TOM"S B. RETENER, "L! N C. RE.ES, R 5"L NO RE.ES, SOLOMON B. RE.ES, ! RG L O G. R C"5", RODEL O R ET", 6R., BEN TO R !ER", 6R., BERN"RDO 6. ROB LLOS, P"BLO ". ROBLES, 6OSE ROBLE5", 7U R NO RON7U LLO, "!EL NO M. RO7UE, MEN"NDRO L. S"B NO, PEDRO S"LG"T"R, EDG"RDO S"LONG", NUMER "NO S"N M"TEO, 8EL 5"RDO DE LOS S"NTOS, 6R., G"BR EL S"NTOS, 6U"N TO S"NTOS, P"7U TO SOL"NTE, CONR"DO ". SOL S, 6R., RODOL8O SULT"N, S" "S T"L"CT"C, 0 LL "M T"RUC, MEN"NDRO TEMPROS", B EN!EN DO S. TOLENT NO, BENED CTO TORRES, M"9 M "NO TORRES, 8R"NC SCO G. TR "S, SERG O ". URSOL NO, ROGEL O !"LDE5, LEGOR O E. !ERG"R", DEL8 N ! CTOR ", G LBERT ! CTOR ", -ERN"NE ! CTOR "NO, 8R"NC SCO ! LL"8LORES, DOM NGO ! LL"-ERMOS", ROL"NDO ! LL"LOBOS, "NTON O ! LL"U5, D"N LO ! LL"NUE!", ROGEL O ! LL"NUE!", "NGEL ! LL"RB", 6U"N TO ! LL"R NO, 8R"NC SCO 5"R", ROGEL O ""L"GOS, N C"NOR B. "B"D, "NDRES "B"NES, RE.N"LDO "B"NES, EDU"RDO "B"NTE, 6OSE "B"RRO, 6OSE8 NO "B"RRO, CELSO S. "BEL"N O, -ERM N O "BELL", M GUEL "BEST"NO, RODR GO G. "BUBO, 6OSE B. "BUST"N, D"NTE "CERES, RE.N"LDO S. "CO6 DO,

LEO0 L N "CT", EUGEN O C. "CUE5", EDU"RDO "CUP"N, RE.N"LDO "CUP"N, SOL"NO "CUP"N, M"NUEL P. "D"N", 8LORENT NO R. "GNE, 7U TER O R. "GUDO, M"NUEL P. "GU N"LDO, D"NTE "GU RRE, -ERM N O "GU RRE, GON5"LO "LBERTO, 6R., CONR"DO "LC"NT"R", L"MBERTO 7. "LC"NT"R", M"R "N TO 6. "LC"NT"R", BENC O "LDO!ER, EUL"L O !. "LE6"NDRO, BEN6"M N "LE6"NDRO, EDU"RDO L. "LE6"NDRO, M"9 M NO "LE6"NDRO, "LBERTO "LMEN"R, "RN"LDO "LON5O, "M"DO "LOR ", C"M LO "L!"RE5, M"NUEL C. "L!"RE5, BEN6"M N R. "MBROC O, C"RLOS "MORES, BERN"RD P. "NC-ET", T MOTEO O. "NC-ET", 6EO8RE. "N , EL NO P. "NT LLON, "RM"NDRO B. "NT PONO, L"RR. T. "NTON O, "NTON O "P L"DO, "RTURO P. "P L"DO, 8R"NC SCO "POL N"R O, B"RTOLOME M. "7U NO, S DRO "7U NO, P"STOR "7U NO, ROSENDO M. "7U NO, ROBERTO "R"NGOR N, BEN6"M N O. "R"TE", "RTURO !. "R"ULLO, PRUDENC O "R"ULLO, "LE9"NDER "RC" R", 8R"NC SCO "RC "G", 6OSE "RE!"LO, 6U"NTO "RE!"LO, R"MON "RE!"LO, RODOL8O "RE!"LO, EUL"L O "RGUELLES, 0 L8REDO P. "R C", 6OSE M. "DES LLO, "NTON O "SUNC ON, "RTEM O M. "SUNC ON, EDG"RDO "SUNC ON, RE9. M. "SUNC ON, ! CENTE "UREL O, "NGEL "USTR ", R C"RDO P. "!ER LL", 6R., ! RG L O "! L", B"RTOLOME "9"L"N, "L8REDO B"B LON ", 8EL MON B"C"L, 6OSE L. B"C"N , ROMULO R. B"LB ER"N, ! CENTE B"LB ER"N, RODOL8O B"L TB T, TEODORO .. B"LOBO, D"N LO O. B"RB", BERN"RDO B"RRO, 6U"N ". B"S L"N, CE8ER NO B"T T S, ! !ENC O C. B"U"N, G"UDENC O S. B"UT ST", LEON"RDO B"UT ST", 6OSE D. B"UT ST", ROST CO B"UT ST", RUPERTO B. B"UT ST", TEODORO S. B"UT ST", ! RG L O B"UT ST", 6ESUS R. B".", 0 N E8REDO B"."C"L, 0 N E8REDO BEB T, BEN G. BEL R, ER C B. BELTR"N, EMEL "NO BEN"LES, 6R., R"UL BEN TE5, PER8ECTO BENS"N, RENEO BERGON O, S"BELO BERMUDE5, ROL"NDO . BERMUDE5, D"N LO BERON, BEN6"M N BERS"M N, "NGEL TO B COL, "NSELMO B COL, CELEST NO B COL, 6R., 8R"NC SCO B COL, ROGEL O B COL, ROMULO L. B COL, ROGEL O B LL ONES, TEO8 LO N. B TO, 8ERN"NDO BL"NCO, "UGUSTO BONDOC, DOM NGO BONDOC, PEPE S. BOOC, 6"MES R. BOR6", 0 L8REDO BR"CEROS, "NGELES C. BREC NO, EURECL.DON G. BR ONES, "M"DO BRUGE, P"BL TO BUD LLO, "RC- MEDES BUEN"!ENTUR", B"S L O BUEN"!ENTUR", GU LLERMO BUENCONSE6O, "LE9"NDER BUST"M"NTE, ! RG L O BUT ONG, 6R., -ONESTO P. C"B"LL", DEL8 N C"B"LLERO, BENED CTO C"B"N G"N, MO SES C"B"T"., -ERM"NEL C"BRER", PEDRO C"G"T"N, 6O!EN C. C"G"."T, ROGEL O L. C"L"GOS, RE.N"LDO !. C"LDE6ON, OSC"R C. C"LDERON, NESTOR D. C"LLE6", REN"TO R. C"LM", NELSON T. C"M"C-O, S"NTOS T. C"M"C-O,

ROBERTO C"M"N", 8LOR"NTE C. C"M"N"G EDG"RDO M. C"ND", SE!ER NO C"NTOS, EP 8"N O ". C"PONPON, EL "S D. C"R LLO, 6R., "RM"NDO C"RREON, MEN"NDRO M. C"ST":ED", BEN GNO ". C"ST LLO, CORNEL O L. C"ST LLO, 6OSEP- B. C"ST LLO, "NSELMO C"ST LLO, 6O"7U N C"ST LLO, P"BLO L. C"ST LLO, ROMEO P. C"ST LLO, SES N"NDO C"T BOG, D"N LO C"STRO, PRUDENC O ". C"STRO, R"MO C"STRO, 6R., ROMEO ". DE C"STRO, 6" ME B. C"TL , DUR"N" D. CE8ER NO, RODOL8O B. CEL S, -ERM N G LDO CERE5O, ! CTOR "NO CELEST NO, BEN6"M N C-"N, "NTON O C. C-U", ! !ENC O B. C "B"L, RODR GO CL"RETE, "UGUSTO COLOM", TUR "NO CONCEPC ON, TERES TO CONST"NT NO, "RM"NDO COR"LES, REN"TO C. CORCUER", "POL N"R CORON"DO, "BEL"RDO CORONEL, 8EL 9 CORONEL, 6R., LEON"RDO CORPU5, 6ESUS M. CORR"LES, CES"R CORTEMPR"TO, 8R"NC SCO O. COR!ER", 8R"NC SCO COST"LES, SR., CELEDON O CRED TO, "LBERTO ". CREUS, "N"CLETO !. CRU5, DOM NGO DEL" CRU5, "MEL "NO DEL" CRU5, 6R., P"NC- TO CRU5, RE.N"LDO B. DEL" CRU5, ROBERTO P. CRU5, TEODORO S. CRU5, 5OS MO DEL" CRU5, D ON S O ". CU"RESM", 8EL MON CU 5ON, 8ERM N D"GONDON, R C-"RD D"GU NS N, CR S"NTO ". D"T"., N C"S O D"NT NGU NOO, 6OSE D"TOON, EDU"RDO D"! D, ENR CO T. D"! D, 8"! O D"! D, ! CTOR "NO S. D"! D, EDG"RDO N. D"."C"P, 6OSEL TO T. DELOSO, CELER NO DE GU5M"N, ROMULO DE GU5M"N, L BER"TO DE GU5M"N, 6OSE DE LEON, 6OSEL TO L. DE LUMB"N, N"POLEON S. DE LUN", R C"RDO DE R"M", GENEROSO DEL ROS"R O, "LBERTO DEL" CRU5, 6OSE DEL" CRU5, LEON"RDO DELOS RE.ES, ERNESTO 8. D "T", EDU"RDO ". D "5, 8EL 9 D "5, MELC-OR D "5, N C"NOR S. D "5, GER"RDO C. D G", CLEMENTE D M"TUL"C, ROL"NDO D ON S O, P- L PP G. D SM".", BEN6"M N DOCTOLERO, "LBERTO STO. DOM NGO, BEN6"M N E. DO5", BEN6"M N DUP", D"N LO C. DUR"N, GREGOR O D. DUR"N, REN"TO ". EDU"RTE, GODO8REDO E. E SM", "RDON B. ELLO, UBED B. ELLO, 6OSE8 NO EN"NO, RE.N"LDO ENC"RN"C ON, EDG"RDO ENGU"NC O, EL "S E7U P"NO, 8EL 5"RDO ESC"RMOS", M GUEL ESC"RMOS", "RM"NDO ESCOB"R, ROMEO T. ESCU.OS, "NGEL TO ESP R TU, EDU"RDO S. ESP R TU, RE.N"LDO ESP R TU, ROL"NDO ESP R TU, 6UL "N ESPREG"NTE, GM D O EST"N SL"O, ERNESTO M. ESTEB"N, MEL"N O R. ESTRO, ERNESTO M. ESTE!", CONR"DO ESTU"R, CL.DE ESTU.E, EL SEO 8"6"RDO, POR8 R O 8"L7UE5", 0 L8REDO P. 8"UST NO, EM L O E. 8ERN"NDE5, "RTEM O 8ERRER, M S"EL M. 8 GUR"C ON, "RM"NDO 8. 8LORES, BEN6"M N 8LORES, EDG"RDO C. 8LORES, BUEN"!ENTUR" 8R"NC SCO, M"NUEL S. 8R"NC SCO, ROL"NDO 8R"NC SCO, !"LER "NO 8R"NC SCO, RODOL8O G"B"0"N, ESMER"LDO G"-UT"N, CES"R C. G"L"NG, S"NT "GO N.

G"LOSO, G"BR EL G"MBO", BERN"RDO G"ND"MON, 6U"N G"N5ON, "NDRES G"RC ", 6R., "RM"NDO M. G"RC ", EUGEN O G"RC ", M"RCELO L. G"RC ", P"TR C O L. G"RC ", 6R., PONC "NO G. G"RC ", PONC "NO G. G"RC ", 6R., R"8"EL P. G"RC ", ROBERTO S. G"RC ", OS "S G. G"RO8 L, R".MUNDO C. G"RON, ROL"NDO G. G"TEL", "!EL NO G".ET", R".MUNDO GERON, PL"C DO GON5"LES, RUPERTO -. GON5"LES, ROGEL O D. GU"N O, M"RT N !. GUERRERO, 6R., "LE9 S GUNO, R C"RDO L. GUNO, 8R"NC SCO GUP T, DENN S 6. GUT ERRE5, GN"C O B. GUT ERRE5, "NGEL TO DE GU5M"N, 6R., CES"R -. -"B"N", R"UL G. -ERN"NDE5, RE.N"LDO -ERN"NDE5, 6O!EN "NO D. - L"DO, 6USTO - L"PO, ROST TO - N"-ON, 8EL C S MO - NG"D", EDU"RDO - POL TO, R"UL L. GN"C O, M"NUEL L. L"G"N, REN"TO L. L"G"N, CONR"DO ". NS ONG, GR"C "NO G. SL", "RNEL L. 6"COB, OSC"R 6. 6"P TENG", C R LO - CB"N, M"9 M "NO -ONR"DES, GENEROSO GN"C O, 8EL PE L"G"N, E9PED TO N. 6"COB, M"R O 6"SM N, B EN!EN DO 6"! ER, ROMEO M. 6"! ER, PR MO DE 6ESUS, RE.N"LDO DE 6ESUS, C"RLOS ". 6 MENE5, D"N LO E. 6 MENE5, PEDRO C. 6O"7U N, 8EL PE 0. 6OCSON, 8EL NO M. 6OCSON, PEDRO N. 6OCSON, !"LENT NO S. 6OCSON, PEDRO B. 6OLO.", ESTEB"N P. 6OSE, 6R., R"UL 6OSE, R C"RDO S"N 6OSE, GERTRUDO ;"B GT NG, EDU"RDO S. ;OL ML M, SR., L"URO 6. L"B"., EMM"NUEL C. L"BELL", EDG"RDO B. L"CERON", 6OSE B. L"CSON, M"R O 6. L"D NES, RU8 NO L"G"C, RODR GO L"G"N"P"N, E8REN M. L"M"DR D, GU"DENC O L"T"N"N, ! RG L O L"T"."N, EM L "NO L"TO6", 0ENCESL"O L"UREL, "L8REDO L"9"M"N", D"N EL R. L"5"RO, "NTON O C. LE"NO, "RTURO S. LEG"SP , BEN TO DE LEMOS, 6R., PEDRO G. DE LEON, M"NOL TO C. L LOC, GER"RDO L MU"CO, ERNESTO S. L S NG, REN"TO L S NG, 0 L8REDO S. L S NG, CR SPULO LONTOC, PEDRO M. LOPER", ROGEL O LOPER", C"RL TO M. LOPE5, CLOD. LOPE5, G"RL TO LOPE5, GEORGE 8. LOPE5, ! RG L O M. LOPE5, BERN"RD TO G. LORE6", DOM NGO B. LOR CO, DOM NGO LO.OL", D"NTE LU"GE, "NTON O M. LU"L-"T , EMM"NUEL LU"L-"T , 6R., LEON DE5 C. LU"L-"T , SEB"ST "N LU"L-"T , 8R"NC SCO LUB"T, "RM"NDO LUCERO, 6OSEL TO L. DE LUMB"N, T-OM"S ! CENTE O. LUN", NOL M"C"L"DL"D, "L8REDO M"C"L NO, R C"RDO M"C"L NO, "RTURO !. M"C"R" G, ERNESTO !. M"C"R" G, RODOL8O !. M"C"R" G, BEN6"M N M"C"T"NG"., -ERMOGENES M"C"T"NG"., RODEL M"C"T"NG"., ROMULO M"C"T"NG"., OS "S 7. M"DL"NGB"."N, N COL"S P. M"DR D, EDELBERTO G. M"G"T, E8REN C. M"GB"NU", BEN6"M N M"GBU-"T, "L8REDO C. M"GC"LENG, "NTON O M"GN".E, "L8ONSO M"GP"NT"., R C"RDO C. M"GP"NT"., S MEON M. M"GP"NT"., "RM"NDO M. M"GS NO, M"C"R O S. M"GS NO, "NTON O

M"GT B"., ! CTOR !. M"GT B"., GERON MO M"- LUM, M"NUEL M"LON5O, R C"RDO M"M"D S, RODOL8O M"N", BERN"RDO ". M"N"L L , M"NUEL M"N"L L , "NGELO M"N"LO, "GU LES L. M"N"LO, LEOPOLDO M"NG"-"S, B"."N M"N GB"S, ROL"NDO C. M"N MT M, D"N EL M"NONSON, ERNESTO 8. M"NUEL, EDU"RDO M"N5"NO, R C"RDO N. M"P", R"MON M"P LE, ROBERTO C. M"R"N", NEMES O M"R"S G"N, 0ENCESL"O M"R"S G"N, LEON"RDO M"RCELO, -ENR. 8. M"R "NO, 6OEL M"R D"BLE, S"NTOS E. M"R NO, N"RC SO ". M"R7UE5, R C"RDO M"RT NE5, D EGO M"S C"MPO, "UREL O M"T"BERDE, REN"TO M"T LL", ! CTOR "NO M"T LL", ! RG L O MEDEL, LOL TO M. MELEC O, BEN GNO MELENDE5, RENER 6. MEM 6E, RE.N"LDO 8. MEM 6E, RODEL MEM 6E, "!EL NO MENDO5", 6R., CL"RO MENDO5", T MOTEO MENDO5", GREGOR O MERC"DO, ERN"N DEL" MERCED, R C"RDO MERCEN", NEMES O METRELLO, RODEL MEM 6E, G"SP"R M N MO, BEN6"M N M R"ND", 8EL 9BERTO D. M S", CL"UD O ". MODESTO, 6R., OSC"R MONDEDO, GENEROSO MONTON, REN"TO MOR"D", R C"RDO MOR"D", RODOL8O MOR"D", ROL"NDO M. MOR"LES, 8EDER CO M. MORENO, ! CTOR NO ". MORTEL, 6R., ESP R TU ". MUNO5, GN"C O MUNO5, LDE8ONSO MUNO5, ROGEL O MUNO5, ERNESTO N"P"L"N, M"RCELO ". N"RC 5O, RE.N"LDO N"T"L ", 8ERN"NDO C. N"!"RETTE, P"C 8 CO D. N"!"RRO, 8LOR"NTE N"5"RENO, R 5"L B. N"5"R O, 6OSUE NEGR TE, "L8REDO NEPUMUCENO, -ERBERT G. NG, 8LORENC O N COL"S, ERNESTO C. N NON, "!EL NO NU7U , NEMES O D. OB", D"N LO OC"MPO, EDG"RDO OC"MPO, RODR GO E. OC"MPO, "NTON O B. OCC "NO, RE.N"LDO P. OCSON, BEN6"M N ODES", "NGEL OL"SO, 8R"NC SCO OL G"R O, 5OS MO OL MBO, BEN6"M N !. OR"LLO, ROMEO S. OR G NES, D"N LO R. ORT"NE5, 0 L8REDO OS "S, ! RG L O P"-", D"! D P""L"N, 6ESUS N. P"C-ECO, "L8ONSO L. P"D LL", D"N LO P"GS"N6"N, NUMER "NO P"GS S -"N, R C"RDO T. P"GU O, EM L O P"; NG"N, LE"NDRO P"L"BR C", 7U NC "NO P"LO, 6OSE P"M"T "N, GON5"LO P"N, POR8 R O P"N, B EN!EN DO P"NG"N, ERNESTO P"NG"N, 8R"NC SCO !. P"S ", ED LBERTO P"S M O, 6R., 6OSE !. P"S ON, "NGEL TO M. PEN", D ON S O PENDR"S, -ERM N O PER"LT", RE.N"LDO M. PER"LT", "NTON O PERE5, "NTOL "NO E. PERE5, 6U"N PERE5, LEON PERE5, ROMEO E. PERE5, ROMULO PERE5, 0 LL "M PERE5, 8ERN"NDO G. PER NO, 8LORENT NO DEL P L"R, DELM"R 8. P NED", S"L!"DOR P NED", EL 5"LDE P NP N, 0 L8REDO P NP N, "RTURO POBLETE, DOM N"DOR R. PR EL", BUEN"!ENTUR" PRUDENTE, C"RMEL TO PRUDENTE, D"NTE PUE.O, RE.N"LDO 7. PUE.O, RODOL8O O. PUL DO, "LE6"NDRO PUN O, 8EDER CO 7U M"N, "L8REDO L. 7U NTO, ROMEO 7U NTOS,

EDU"RDO 0. R"C"BO, R C"RDO C. DE R"M", R C"RDO L. DE R"M", ROL"NDO DE R"M", 8ERN"NDO ". R"M RE5, L TO S. R"M RE5, R C"RDO G. R"M RE5, RODOL8O !. R"M RE5, "LBERTO R"MOS, "NSELMO C. R"MOS, TOB "S R"MOS, 0 LL"R8REDO R".MUNDO, RE.N"LDO R"7UED"N, M"NUEL 8. R"!EL"S, 0 L8REDO D. R".MUNDO, ERNESTO E. RECOL"SO, "LBERTO RED"5", "RT-UR RE6USO, TOR B O M. RELL"M", 6" ME RELLOS", EUGEN O ". REMO7U LLO, GER"RDO RENTO5", REDENTOR C. RE., "L8REDO S. RE.ES, "M"BLE S. RE.ES, BENED CTO R. RE.ES, GREGOR O B. RE.ES, 6OSE ". RE.ES, 6OSE C. RE.ES, ROMULO M. RE.ES, SERG O RE.ES, ERNESTO 8. R CO, 8ERN"NDO M. R CO, EMM"NUEL R ET", R C"RDO R ET", LEO B. ROBLES, RUBEN ROBLES, RODOL8O ROBLE5", RODR GO ROBLE5", EDU"RDO ROC"BO, "NTON O R. RODR GUE5, BERN"RDO RODR GUE5, EL G O RODR GUE5, "LMONTE ROMEO, EL "S RON7U LLO, EL SE RON7U LLO, LU S !"L B. RON7U LLO, RE.NOSO P. RON7U LLO, RODOL8O RON7U LLO, "NGEL ROS"LES, R"MON ROS"LES, "LBERTO DEL ROS"R O, GENEROSO DEL ROS"R O, TEODOR CO DEL ROS"R O, ! RG L O L. ROS"R O, C"RL TO S"L!"DOR, 6OSE S"MP"R"D", ERNESTO S"N PEDRO, "DR "NO !. S"NC-", GERON MO M. S"NC-", "RTEM O B. S"NC-E5, N C"S O S"NC-E5, "POLON O P. S"NT "GO, 6OSEL TO S. S"NT "GO, SERG O S"NT "GO, ED LBERTO C. S"NTOS, E8REN S. S"NTOS, REN"TO D. S"NTOS, M GUEL S"PU.OT, "LE9 S. SER7U N", DOM N"DOR P. SERR", ROMEO S DRO, "M"DO M. S L"NG, 8"UST NO D. S L"NG, RODOL8O B. DE S LOS, "N CETO G. S L!", EDG"RDO M. S L!", ROL"NDO C. S L!ERTO, "RT-UR B. S MB"-ON, DOM NGO SOL"NO, 6OSEL TO C. SOL"NTE, C"RL TO SOL S, CONR"DO SOL S, , EDG"RDO SOL S, ERNESTO SOL S, S"G"N M. SOL S, EDU"RDO L. SOTTO, ERNESTO G. ST". M"R ", ! CENTE G. STELL", 8EL MON SUP"NG, PETER T"NGU NOO, M"9 M NO T"L BS"O, 8EL C SMO P. T"LUS ;, 8ERM N T"RUC, 6R., LE!. S. TEMPLO, RODOL8O S. T "MSON, LEON LO T POSO, "RNEL TOLENT NO, M"R O M. TOLENT NO, 8EL PE TORR"LB", 6O! TO !. TORRES, LEON"RDO DE TORRES, G"! NO U. TU"5ON, "UGUSTO B. TUNGU ", 8R"NC SCO UM"L , S MPL C O UN D", 0 L8REDO !. UNT"L"N, "NTON O !"LDER"M", R"MON !"LDER"M", N LO !"LENC "NO, EDG"RDO C. !"S7UE5, ELP D O !EL"S7UE5, NESTOR DE !ER", 0 L8REDO D. !ER", B EN!EN DO !ERG"R", "L8REDO !ERG"R", R"MON R. !ER5OS", 8EL C TO P. ! CMUNDO, "L8REDO ! CTOR "NO, TEO8 LO P. ! D"LLO, S"B NO N. ! ERNE5, 6ESUS 6. ! LL", 6O!EN ! LL"BL"NCO, EDG"RDO G. ! LL"8LORES, CE8ER NO ! LL"GER", "LE9 ! LL"-ERMO5", D"N LO ". ! LL"NUE!", EL TO ! LL"NUE!", LEON"RDO M. ! LL"NUE!", M"NUEL R. ! LL"NUE!", NEPT-"L ! LL"R, 6OSE !. ! LL"RE"L, 8EL C S MO ! LL"R NO,

R"8"EL ! LL"ROM"N, C"RLOS ! LLEN", 8ERD N"ND ! !O, ROBERTO ."BUT, ! CENTE .NGENTE, "ND ORO C. 5UN G",respondents. erardo !. Del Mundo and !ssociates for petitioners. Ro"ulo, Mabanta, Sa#oc, $uenaventura, De los !n%eles &a' Offices for $RII(!I$). Florante M. De )astro for private respondents in *+,+-./0-.

7U "SON, J.: The petition in .R. No. *+1223, entitled 4$ienvenido M. )adalin, et. al. v. Philippine Overseas 5"plo#"ent !d"inistration6s !d"inistrator, et. al.,4 'as filed under Rule 3, of the Revised Rules of )ourt7 8*9 to "odif# the Resolution dated Septe"ber -, *..* of the National &abor Relations )o""ission 8N&R)9 in PO5! )ases Nos. &/:1/+3/,,,, &/:,/*+/222, &/:,/*+/22. and &/:3/+,/13+; 8-9 to render a ne' decision7 8i9 declarin% private respondents as in default; 8ii9 declarin% the said labor cases as a class suit; 8iii9 orderin% !sia International $uilders )orporation 8!I$)9 and $ro'n and Root International Inc. 8$RII9 to pa# the clai"s of the *,232 clai"ants in said labor cases; 8iv9 declarin% !tt#. Florante M. de )astro %uilt# of foru"/shoppin%; and 8v9 dis"issin% PO5! )ase No. &/:3/+,/13+; and 809 to reverse the Resolution dated March -1, *..- of N&R), den#in% the "otion for reconsideration of its Resolution dated Septe"ber -, *..* 8Rollo, pp. :/-::9. The petition in .R. Nos. *+1.**/*1, entitled 4$ienvenido M. )adalin, et. al., v. <on. National &abor Relations )o""ission, et. al.,4 'as filed under Rule 3, of the Revised Rules of )ourt7 8*9 to reverse the Resolution dated Septe"ber -, *..* of N&R) in PO5! )ases Nos. &/:1/+3/,,,, &/:,/*+/222, &/:,/*+/2.. and &/:3/+,/13+ insofar as it7 8i9 applied the three/#ear prescriptive period under the &abor )ode of the Philippines instead of the ten/#ear prescriptive period under the )ivil )ode of the Philippines; and 8ii9 denied the

4three/hour dail# avera%e4 for"ula in the co"putation of petitioners6 overti"e pa#; and 8-9 to reverse the Resolution dated March -1, *..- of N&R), den#in% the "otion for reconsideration of its Resolution dated Septe"ber -, *..* 8Rollo, pp. :/-,; -3/--+9. The petition in .R. Nos. *+,+-./0-, entitled 4!sia International $uilders )orporation, et. al., v. National &abor Relations )o""ission, et. al.4 'as filed under Rule 3, of the Revised Rules of )ourt7 8*9 to reverse the Resolution dated Septe"ber -, *..* of N&R) in PO5! )ases Nos. &/:1/+3/,,,, &/:,/*+/222, &/:,/*+/22. and &/:3/+,/13+, insofar as it %ranted the clai"s of *1. clai"ants; and 8-9 to reverse the Resolution dated March -*, *..- of N&R) insofar as it denied the "otions for reconsideration of !I$) and $RII 8Rollo, pp. -/,.; 3*/-0+9. The Resolution dated Septe"ber -, *..* of N&R), 'hich "odified the decision of PO5! in four labor cases7 8*9 a'arded "onetar# benefits onl# to *1. clai"ants and 8-9 directed &abor !rbiter Fati"a =. Franco to conduct hearin%s and to receive evidence on the clai"s dis"issed b# the PO5! for lac> of substantial evidence or proof of e"plo#"ent. Consolidation of Cases .R. Nos. *+1223 and *+,+-./0- 'ere ori%inall# raffled to the Third Division 'hile .R. Nos. *+1.**/*1 'ere raffled to the Second Division. In the Resolution dated =ul# -3, *..0, the Second Division referred .R. Nos. *+1.**/*1 to the Third Division 8 .R. Nos. *+1.**/*1, Rollo, p. :.,9. In the Resolution dated Septe"ber -., *..0, the Third Division %ranted the "otion filed in .R. Nos. *+1.**/*1 for the consolidation of said cases 'ith .R. Nos. *+1223 and *+,+-./0-, 'hich 'ere assi%ned to the First Division 8 .R. Nos. *+1.**/*1, Rollo, pp. .:3/*,*+2; .R. Nos. *+,+-./0+, Rollo, pp. 03./022, 1-3/10-9. In the Resolution dated October -2, *..0, the First Division %ranted the "otion to consolidate .R. Nos. *+1.**/*1 'ith .R. No. *+1223 8 .R. Nos. *+1.**/*1, Rollo, p. **+.; .R. Nos. *+,+-./ 0-, Rollo, p. *,3-9. I

On =une 3, *.:1, $ienvenido M.. )adalin, Rolando M. !"ul and Donato $. 5van%elista, in their o'n behalf and on behalf of 2-: other overseas contract 'or>ers 8O)?s9 instituted a class suit b# filin% an 4!"ended )o"plaint4 'ith the Philippine Overseas 5"plo#"ent !d"inistration 8PO5!9 for "one# clai"s arisin% fro" their recruit"ent b# !I$) and e"plo#"ent b# $RII 8PO5! )ase No. &/:1/+3/,,,9. The clai"ants 'ere represented b# !tt#. erardo del Mundo. $RII is a forei%n corporation 'ith head@uarters in <ouston, TeAas, and is en%a%ed in construction; 'hile !I$) is a do"estic corporation licensed as a service contractor to recruit, "obiliBe and deplo# Filipino 'or>ers for overseas e"plo#"ent on behalf of its forei%n principals. The a"ended co"plaint principall# sou%ht the pa#"ent of the uneApired portion of the e"plo#"ent contracts, 'hich 'as ter"inated pre"aturel#, and secondaril#, the pa#"ent of the interest of the earnin%s of the Travel and Reserved Fund, interest on all the unpaid benefits; area 'a%e and salar# differential pa#; frin%e benefits; refund of SSS and pre"iu" not re"itted to the SSS; refund of 'ithholdin% taA not re"itted to the $IR; penalties for co""ittin% prohibited practices; as 'ell as the suspension of the license of !I$) and the accreditation of $RII 8 .R. No. *+1223, Rollo, pp. *0/*19. !t the hearin% on =une -,, *.:1, !I$) 'as furnished a cop# of the co"plaint and 'as %iven, to%ether 'ith $RII, up to =ul# ,, *.:1 to file its ans'er. On =ul# 0, *.:1, PO5! !d"inistrator, upon "otion of !I$) and $RII, ordered the clai"ants to file a bill of particulars 'ithin ten da#s fro" receipt of the order and the "ovants to file their ans'ers 'ithin ten da#s fro" receipt of the bill of particulars. The PO5! !d"inistrator also scheduled a pre/trial conference on =ul# -,, *.:1. On =ul# *0, *.:1, the clai"ants sub"itted their 4)o"pliance and Manifestation.4 On =ul# -0, *.:1, !I$) filed a 4Motion to Stri>e Out of the Records4, the 4)o"plaint4 and the 4)o"pliance and Manifestation.4 On =ul# -,, *.:1, the clai"ants filed their 4ReCoinder and )o""ents,4 averrin%, a"on% other "atters, the failure of !I$) and $RII to file their ans'ers and to attend the pre/trial conference on =ul# -,, *.:1. The clai"ants alle%ed that !I$) and $RII had 'aived their ri%ht to present evidence and had defaulted b# failin% to file their ans'ers and to attend the pre/trial conference.

On October -, *.:1, the PO5! !d"inistrator denied the 4Motion to Stri>e Out of the Records4 filed b# !I$) but re@uired the clai"ants to correct the deficiencies in the co"plaint pointed out in the order. On October *+, *.:1, clai"ants as>ed for ti"e 'ithin 'hich to co"pl# 'ith the Order of October -, *.:1 and filed an 4Dr%ent Manifestation,4 pra#in% that the PO5! !d"inistrator direct the parties to sub"it si"ultaneousl# their position papers, after 'hich the case should be dee"ed sub"itted for decision. On the sa"e da#, !tt#. Florante de )astro filed another co"plaint for the sa"e "one# clai"s and benefits in behalf of several clai"ants, so"e of 'ho" 'ere also clai"ants in PO5! )ase No. &/:1/+3/,,, 8PO5! )ase No. :,/*+/22.9. On October *., *.:1, clai"ants filed their 4)o"pliance4 'ith the Order dated October -, *.:1 and an 4Dr%ent Manifestation,4 pra#in% that the PO5! direct the parties to sub"it si"ultaneousl# their position papers after 'hich the case 'ould be dee"ed sub"itted for decision. On the sa"e da#, !I$) as>ed for ti"e to file its co""ent on the 4)o"pliance4 and 4Dr%ent Manifestation4 of clai"ants. On Nove"ber 3, *.:1, it filed a second "otion for eAtension of ti"e to file the co""ent. On Nove"ber :, *.:1, the PO5! !d"inistrator infor"ed !I$) that its "otion for eAtension of ti"e 'as %ranted. On Nove"ber *1, *.:1, clai"ants filed an opposition to the "otions for eAtension of ti"e and as>ed that !I$) and $RII be declared in default for failure to file their ans'ers. On Nove"ber -+, *.:1, !I$) and $RII filed a 4)o""ent4 pra#in%, a"on% other reliefs, that clai"ants should be ordered to a"end their co"plaint. On Dece"ber -2, *.:1, the PO5! !d"inistrator issued an order directin% !I$) and $RII to file their ans'ers 'ithin ten da#s fro" receipt of the order. On Februar# -2, *.:,, !I$) and $RII appealed to N&R) see>in% the reversal of the said order of the PO5! !d"inistrator. )lai"ants opposed the appeal, clai"in% that it 'as dilator# and pra#in% that !I$) and $RII be declared in default. On !pril -, *.:,, the ori%inal clai"ants filed an 4!"ended )o"plaint and(or Position Paper4 dated March -1, *.:,, addin% ne' de"ands7 na"el#, the pa#"ent of overti"e pa#, eAtra ni%ht 'or> pa#, annual leave differential pa#, leave inde"nit# pa#, retire"ent and savin%s benefits and their share of forfeitures 8 .R. No. *+1223, Rollo, pp. *1/*39. On !pril *,, *.:,, the PO5!

!d"inistrator directed !I$) to file its ans'er to the a"ended co"plaint 8 .R. No. *+1223, Rollo, p. -+9. On Ma# -:, *.:,, clai"ants filed an 4Dr%ent Motion for Su""ar# =ud%"ent.4 On the sa"e da#, the PO5! issued an order directin% !I$) and $RII to file their ans'ers to the 4!"ended )o"plaint,4 other'ise, the# 'ould be dee"ed to have 'aived their ri%ht to present evidence and the case 'ould be resolved on the basis of co"plainant6s evidence. On =une ,, *.:,, !I$) countered 'ith a 4Motion to Dis"iss as I"proper )lass Suit and Motion for $ill of Particulars Re7 !"ended )o"plaint dated March -1, *.:,.4 )lai"ants opposed the "otions. On Septe"ber 1, *.:,, the PO5! !d"inistrator reiterated his directive to !I$) and $RII to file their ans'ers in PO5! )ase No. &/:1/+3/,,,. On Septe"ber *:, *.:,, !I$) filed its second appeal to the N&R), to%ether 'ith a petition for the issuance of a 'rit of inCunction. On Septe"ber *., *.:,, N&R) enCoined the PO5! !d"inistrator fro" hearin% the labor cases and suspended the period for the filin% of the ans'ers of !I$) and $RII. On Septe"ber *., *.:,, clai"ants as>ed the PO5! !d"inistrator to include additional clai"ants in the case and to investi%ate alle%ed 'ron%doin%s of $RII, !I$) and their respective la'#ers. On October *+, *.:,, Ro"eo Pata% and t'o co/clai"ants filed a co"plaint 8PO5! )ase No. &/:,/*+/2229 a%ainst !I$) and $RII 'ith the PO5!, de"andin% "onetar# clai"s si"ilar to those subCect of PO5! )ase No. &/:1/ +3/,,,. In the sa"e "onth, Solo"on Re#es also filed his o'n co"plaint 8PO5! )ase No. &/:,/*+/22.9 a%ainst !I$) and $RII. On October *2, *.:,, the la' fir" of Florante M. de )astro E !ssociates as>ed for the substitution of the ori%inal counsel of record and the cancellation of the special po'ers of attorne# %iven the ori%inal counsel. On Dece"ber *-, *.:,, !tt#. Del Mundo filed in N&R) a notice of the clai" to enforce attorne#6s lien. On Ma# -., *.:3, !tt#. De )astro filed a co"plaint for "one# clai"s 8PO5! )ase No. :3/+,/13+9 in behalf of ** clai"ants includin% $ienvenido )adalin, a clai"ant in PO5! )ase No. :1/+3/,,,. On Dece"ber *-, *.:3, the N&R) dis"issed the t'o appeals filed on Februar# -2, *.:, and Septe"ber *:, *.:, b# !I$) and $RII.

In narratin% the proceedin%s of the labor cases before the PO5! !d"inistrator, it is not a"iss to "ention that t'o cases 'ere filed in the Supre"e )ourt b# the clai"ants, na"el# F .R. No. 2-*0- on Septe"ber -3, *.:, and !d"inistrative )ase No. -:,: on March *:, *.:3. On Ma# *0, *.:2, the Supre"e )ourt issued a resolution in !d"inistrative )ase No. -:,: directin% the PO5! !d"inistrator to resolve the issues raised in the "otions and oppositions filed in PO5! )ases Nos. &/:1/+3/,,, and &/:3/+,/ 13+ and to decide the labor cases 'ith deliberate dispatch. !I$) also filed a petition in the Supre"e )ourt 8 .R. No. 2:1:.9, @uestionin% the Order dated Septe"ber 1, *.:, of the PO5! !d"inistrator. Said order re@uired $RII and !I$) to ans'er the a"ended co"plaint in PO5! )ase No. &/:1/+3/,,,. In a resolution dated Nove"ber ., *.:2, 'e dis"issed the petition b# infor"in% !I$) that all its technical obCections "a# properl# be resolved in the hearin%s before the PO5!. )o"plaints 'ere also filed before the O"buds"an. The first 'as filed on Septe"ber --, *.:: b# clai"ant <er"ie !r%uelles and *: co/clai"ants a%ainst the PO5! !d"inistrator and several N&R) )o""issioners. The O"buds"an "erel# referred the co"plaint to the Secretar# of &abor and 5"plo#"ent 'ith a re@uest for the earl# disposition of PO5! )ase No. &/:1/ +3/,,,. The second 'as filed on !pril -:, *.:. b# clai"ants 5"i%dio P. $autista and Rolando R. &obeta char%in% !I$) and $RII for violation of labor and social le%islations. The third 'as filed b# =ose R. Santos, MaAi"ino N. Talibsao and !"ado $. $ruce denouncin% !I$) and $RII of violations of labor la's. On =anuar# *0, *.:2, !I$) filed a "otion for reconsideration of the N&R) Resolution dated Dece"ber *-, *.:3. On =anuar# *1, *.:2, !I$) reiterated before the PO5! !d"inistrator its "otion for suspension of the period for filin% an ans'er or "otion for eAtension of ti"e to file the sa"e until the resolution of its "otion for reconsideration of the order of the N&R) dis"issin% the t'o appeals. On !pril -:, *.:2, N&R) en banc denied the "otion for reconsideration. !t the hearin% on =une *., *.:2, !I$) sub"itted its ans'er to the co"plaint. !t the sa"e hearin%, the parties 'ere %iven a period of *, da#s fro" said date 'ithin 'hich to sub"it their respective position papers. On =une -1, *.:2 clai"ants filed their 4Dr%ent Motion to Stri>e Out !ns'er,4 alle%in% that the ans'er 'as filed out of ti"e. On =une -., *.:2, clai"ants filed their 4Supple"ent to Dr%ent Manifestational Motion4 to co"pl# 'ith the PO5! Order of =une *., *.:2. On Februar# -1, *.::, !I$) and $RII sub"itted their position paper. On March 1, *.::, clai"ants filed their 4 Ex-

Parte Motion to 5Apun%e fro" the Records4 the position paper of !I$) and $RII, clai"in% that it 'as filed out of ti"e. On Septe"ber *, *.::, the clai"ants represented b# !tt#. De )astro filed their "e"orandu" in PO5! )ase No. &/:3/+,/13+. On Septe"ber 3, *.::, !I$) and $RII sub"itted their Supple"ental Me"orandu". On Septe"ber *-, *.::, $RII filed its 4Repl# to )o"plainant6s Me"orandu".4 On October -3, *.::, clai"ants sub"itted their 4Ex-Parte Manifestational Motion and )ounter/Supple"ental Motion,4 to%ether 'ith 113 individual contracts of e"plo#"ents and service records. On October -2, *.::, !I$) and $RII filed a 4)onsolidated Repl#.4 On =anuar# 0+, *.:., the PO5! !d"inistrator rendered his decision in PO5! )ase No. &/:1/+3/,,, and the other consolidated cases, 'hich a'arded the a"ount of G:-1,3,-.11 in favor of onl# 0-1 co"plainants. On Februar# *+, *.:., clai"ants sub"itted their 4!ppeal Me"orandu" For Partial !ppeal4 fro" the decision of the PO5!. On the sa"e da#, !I$) also filed its "otion for reconsideration and(or appeal in addition to the 4Notice of !ppeal4 filed earlier on Februar# 3, *.:. b# another counsel for !I$). On Februar# *2, *.:., clai"ants filed their 4!ns'er to !ppeal,4 pra#in% for the dis"issal of the appeal of !I$) and $RII. On March *,, *.:., clai"ants filed their 4Supple"ent to )o"plainants6 !ppeal Me"orandu",4 to%ether 'ith their 4ne'l# discovered evidence4 consistin% of pa#roll records. On !pril ,, *.:., !I$) and $RII sub"itted to N&R) their 4Manifestation,4 statin% a"on% other "atters that there 'ere onl# 2-: na"ed clai"ants. On !pril -+, *.:., the clai"ants filed their 4)ounter/Manifestation,4 alle%in% that there 'ere *,232 of the". On =ul# -2, *.:., clai"ants filed their 4Dr%ent Motion for 5Aecution4 of the Decision dated =anuar# 0+, *.:. on the %rounds that $RII had failed to appeal on ti"e and !I$) had not posted the supersedeas bond in the a"ount of G:-1,3,-.11. On Dece"ber -0, *.:., clai"ants filed another "otion to resolve the labor cases. On !u%ust -*, *..+, clai"ants filed their 4Manifestational Motion,4 pra#in% that all the *,232 clai"ants be a'arded their "onetar# clai"s for failure of

private respondents to file their ans'ers 'ithin the re%la"entar# period re@uired b# la'. On Septe"ber -, *..*, N&R) pro"ul%ated its Resolution, disposin% as follo's7 ?<5R5FOR5, pre"ises considered, the Decision of the PO5! in these consolidated cases is "odified to the eAtent and in accordance 'ith the follo'in% dispositions7 *. The clai"s of the .1 co"plainants identified and listed in !nneA 4!4 hereof are dis"issed for havin% prescribed; -. Respondents !I$) and $ro'n E Root are hereb# ordered, Cointl# and severall#, to pa# the *1. co"plainants, identified and listed in !nneA 4$4 hereof, the peso e@uivalent, at the ti"e of pa#"ent, of the total a"ount in DS dollars indicated opposite their respective na"es; 0. The a'ards %iven b# the PO5! to the *. co"plainants classified and listed in !nneA 4)4 hereof, 'ho appear to have 'or>ed else'here than in $ahrain are hereb# set aside. 1. !ll clai"s other than those indicated in !nneA 4$4, includin% those for overti"e 'or> and favorabl# %ranted b# the PO5!, are hereb# dis"issed for lac> of substantial evidence in support thereof or are be#ond the co"petence of this )o""ission to pass upon. In addition, this )o""ission, in the eAercise of its po'ers and authorit# under !rticle -*:8c9 of the &abor )ode, as a"ended b# R.!. 32*,, hereb# directs &abor !rbiter Fati"a =. Franco of this )o""ission to su""on parties, conduct hearin%s and receive evidence, as eApeditiousl# as possible, and thereafter sub"it a 'ritten report to this )o""ission 8First Division9 of the proceedin%s ta>en, re%ardin% the clai"s of the follo'in%7 8a9 co"plainants identified and listed in !nneA 4D4 attached and "ade an inte%ral part of this Resolution, 'hose clai"s 'ere dis"issed b# the

PO5! for lac> of proof of e"plo#"ent in $ahrain 8these co"plainants nu"berin% 3:0, are listed in pa%es *0 to -0 of the decision of PO5!, subCect of the appeals9 and, 8b9 co"plainants identified and listed in !nneA 454 attached and "ade an inte%ral part of this Resolution, 'hose a'ards decreed b# the PO5!, to Our "ind, are not supported b# substantial evidence4 8 .R. No. *+1223; Rollo, pp. **0/**,; .R. Nos. *+1.**/*1, pp. :,/:2; .R. Nos. *+,+-./ 0*, pp. *-+/*--9. On Nove"ber -2, *..*, clai"ant !"ado S. Tolentino and *co/clai"ants, 'ho 'ere for"er clients of !tt#. Del Mundo, filed a petition for certiorari 'ith the Supre"e )ourt 8 .R. Nos. *-+21*/119. The petition 'as dis"issed in a resolution dated =anuar# -2, *..-. Three "otions for reconsideration of the Septe"ber -, *..* Resolution of the N&R) 'ere filed. The first, b# the clai"ants represented b# !tt#. Del Mundo; the second, b# the clai"ants represented b# !tt#. De )astro; and the third, b# !I$) and $RII. In its Resolution dated March -1, *..-, N&R) denied all the "otions for reconsideration. <ence, these petitions filed b# the clai"ants represented b# !tt#. Del Mundo 8 .R. No. *+12239, the clai"ants represented b# !tt#. De )astro 8 .R. Nos. *+1.**/*19 and b# !I$) and $RII 8 .R. Nos. *+,+-./0-9. II Compromise Agreements $efore this )ourt, the clai"ants represented b# !tt#. De )astro and !I$) and $RII have sub"itted, fro" ti"e to ti"e, co"pro"ise a%ree"ents for our approval and Cointl# "oved for the dis"issal of their respective petitions insofar as the clai"ants/parties to the co"pro"ise a%ree"ents 'ere concerned 8See !nneA ! for list of clai"ants 'ho si%ned @uitclai"s9. Thus the follo'in% "anifestations that the parties had arrived at a co"pro"ise a%ree"ent and the correspondin% "otions for the approval of the a%ree"ents 'ere filed b# the parties and approved b# the )ourt7

*9 =oint Manifestation and Motion involvin% clai"ant 5"i%dio !bar@ueB and 12 co/clai"ants dated Septe"ber -, *..- 8 .R. Nos. *+1.**/*1, Rollo, pp. -30/1+3; .R. Nos. *+,+-./ 0-, Rollo, pp. 12+/3*,9; -9 =oint Manifestation and Motion involvin% petitioner $ienvenido )adalin and :- co/petitioners dated Septe"ber 0, *..- 8 .R. No. *+1223, Rollo, pp. 031/,+29; 09 =oint Manifestation and Motion involvin% clai"ant =ose M. !ban and 03 co/clai"ants dated Septe"ber *2, *..- 8 .R. Nos. *+,+-./0-, Rollo, pp. 3*0/2--; .R. No. *+1223, Rollo, pp. ,*:/3-3; .R. Nos. *+1.**/*1, Rollo, pp. 1+2/,*39; 19 =oint Manifestation and Motion involvin% clai"ant !ntonio T. !n%lo and *2 co/clai"ants dated October *1, *..- 8 .R. Nos. *+,+-./0-, Rollo, pp. 22:/:10; .R. No. *+1223, Rollo, pp. 3,+/2*0; .R. Nos. *+1.**/*1, Rollo, pp. ,0+/,.+9; ,9 =oint Manifestation and Motion involvin% clai"ant Dionisio $obon%o and 3 co/clai"ants dated =anuar# *,, *..0 8 .R. No. *+1223, Rollo, pp. :*0/:03; .R. Nos. *+1.**/*1, Rollo, pp. 3-./3,-9; 39 =oint Manifestation and Motion involvin% clai"ant Valerio !. 5van%elista and 1 co/clai"ants dated March *+, *..0 8 .R. Nos. *+1.**/*1, Rollo, pp. 20*/213; .R. No. *+1223, Rollo, pp. *:*,/*:-.9; 29 =oint Manifestation and Motion involvin% clai"ants Palconeri $anaa% and , co/clai"ants dated March *2, *..0 8 .R. No. *+1223, Rollo, pp. *3,2/*2+0; .R. Nos. *+1.**/*1, Rollo, pp. 3,,/32,9; :9 =oint Manifestation and Motion involvin% clai"ant $enCa"in !"brosio and *, other co/clai"ants dated Ma# 1, *..0 8 .R. Nos. *+,+-./0-, Rollo, pp. .+3/.,3; .R. Nos. *+1.**/ *1, Rollo, pp. 32./2-.; .R. No. *+1223, Rollo, pp. *220/*:*19; .9 =oint Manifestation and Motion involvin% Valerio 5van%elista and 0 co/clai"ants dated Ma# *+, *..0 8 .R. No. *+1223, Rollo, pp. *:*,/*:-.9;

*+9 =oint Manifestation and Motion involvin% petitioner Huiterio R. !%udo and 03 co/clai"ants dated =une *1, *..0 8 .R. Nos. *+,+-./0-, Rollo, pp. .21/**.+; .R. Nos. *+1.**/*1, Rollo, pp. 21:/:31; .R. No. *+1223, Rollo, pp. *+33/**:09; **9 =oint Manifestation and Motion involvin% clai"ant !rnaldo =. !lonBo and *. co/clai"ants dated =ul# --, *..0 8 .R. No. *+1223, Rollo, pp. **20/*-0,; .R. Nos. *+,+-./0-, Rollo, pp. **.0/*-,3; .R. Nos. *+1.**/*1, Rollo, pp. :.3/.,.9; *-9 =oint Manifestation and Motion involvin% clai"ant Ricardo ). Da#rit and - co/clai"ants dated Septe"ber 2, *..0 8 .R. Nos. *+,+-./0-, Rollo, pp. *-33/*-2:; .R. No. *+1223, Rollo, pp. *-10/*-,1; .R. Nos. *+1.**/*1,Rollo, pp. .2-/.:19; *09 =oint Manifestation and Motion involvin% clai"ant Dante ). !ceres and 02 co/clai"ants dated Septe"ber :, *..0 8 .R. No. *+1223, Rollo, pp. *-,2/*02,; .R. Nos. *+1.**/*1, Rollo, pp. .:2/**+,; .R. Nos. *+,+-./0-, Rollo, pp. *-:+/*0.29; *19 =oint Manifestation and Motion involvin% Vivencio V. !bella and -2 co/clai"ants dated =anuar# *+, *..1 8 .R. Nos. *+,+-./ 0-, Rollo, Vol. II9; *,9 =oint Manifestation and Motion involvin% Do"in%o $. Solano and siA co/clai"ants dated !u%ust -,, *..1 8 .R. Nos. *+,+-./ 0-; .R. No. *+1223; .R. Nos. *+1.**/*19. III The facts as found b# the N&R) are as follo's7 ?e have ta>en painsta>in% efforts to sift over the "ore than fift# volu"es no' co"prisin% the records of these cases. Fro" the records, it appears that the co"plainants/appellants alle%e that the# 'ere recruited b# respondent/appellant !I$) for its accredited forei%n principal, $ro'n E Root, on various dates fro" *.2, to *.:0. The# 'ere all deplo#ed at various proCects underta>en b# $ro'n E Root in several countries in the Middle 5ast, such as Saudi !rabia, &ib#a, Dnited !rab 5"irates and $ahrain, as 'ell as in Southeast !sia, in Indonesia and Mala#sia. <avin% been officiall# processed as overseas contract 'or>ers b# the Philippine overn"ent, all the individual co"plainants si%ned

standard overseas e"plo#"ent contracts 8Records, Vols. -,/0-. <ereafter, reference to the records 'ould be sparin%l# "ade, considerin% their chaotic arran%e"ent9 'ith !I$) before their departure fro" the Philippines. These overseas e"plo#"ent contracts invariabl# contained the follo'in% relevant ter"s and conditions. P!RT $ F 8*9 5"plo#"ent Position )lassification 7FFFFFFFFF 8)ode9 7FFFFFFFFF 8-9 )o"pan# 5"plo#"ent Status 7FFFFFFFFF 809 Date of 5"plo#"ent to )o""ence on 7FFFFFFFFF 819 $asic ?or>in% <ours Per ?ee> 7FFFFFFFFF 8,9 $asic ?or>in% <ours Per Month 7FFFFFFFFF 839 $asic <ourl# Rate 7FFFFFFFFF 829 Overti"e Rate Per <our 7FFFFFFFFF 8:9 ProCected Period of Service 8SubCect to )8*9 of this IsicJ9 7FFFFFFFFF Months and(or =ob )o"pletion AAA AAA AAA 0. <ODRS OF ?ORK !ND )OMP5NS!TION a9 The 5"plo#ee is e"plo#ed at the hourl# rate and overti"e rate as set out in Part $ of this Docu"ent. b9 The hours of 'or> shall be those set forth b# the 5"plo#er, and 5"plo#er "a#, at his sole option, chan%e or adCust such hours as "a#be dee"ed necessar# fro" ti"e to ti"e. 1. T5RMIN!TION a9 Not'ithstandin% an# other ter"s and conditions of this a%ree"ent, the 5"plo#er "a#, at his sole discretion, ter"inate e"plo#ee6s service 'ith cause, under this a%ree"ent at an# ti"e. If the 5"plo#er ter"inates the services of the 5"plo#ee under this !%ree"ent because of the co"pletion or ter"ination, or suspension of the 'or> on 'hich the 5"plo#ee6s services 'ere bein% utiliBed, or because of a reduction in force due to a decrease in scope of such 'or>, or b# chan%e in the t#pe of

construction of such 'or>. The 5"plo#er 'ill be responsible for his return transportation to his countr# of ori%in. Nor"all# on the "ost eApeditious air route, econo"# class acco""odation. AAA AAA AAA *+. V!)!TION(SI)K &5!V5 $5N5FITS a9 !fter one 8*9 #ear of continuous service and(or satisfactor# co"pletion of contract, e"plo#ee shall be entitled to *-/da#s vacation leave 'ith pa#. This shall be co"puted at the basic 'a%e rate. Fractions of a #ear6s service 'ill be co"puted on a pro-rata basis. b9 Sic> leave of *,/da#s shall be %ranted to the e"plo#ee for ever# #ear of service for non/'or> connected inCuries or illness. If the e"plo#ee failed to avail of such leave benefits, the sa"e shall be forfeited at the end of the #ear in 'hich said sic> leave is %ranted. **. $ONDS ! bonus of -+L 8for offshore 'or>9 of %ross inco"e 'ill be accrued and pa#able onl# upon satisfactor# co"pletion of this contract. *-. OFFD!M P!M The seventh da# of the 'ee> shall be observed as a da# of rest 'ith : hours re%ular pa#. If 'or> is perfor"ed on this da#, all hours 'or> shall be paid at the pre"iu" rate. <o'ever, this offda# pa# provision is applicable onl# 'hen the la's of the <ost )ountr# re@uire pa#"ents for rest da#. In the State of $ahrain, 'here so"e of the individual co"plainants 'ere deplo#ed, <is MaCest# Isa $in Sal"an !l Kaifa, !"ir of $ahrain, issued his !"iri Decree No. -0 on =une *3, *.23, other'ise >no'n as the &abour &a' for the Private Sector 8Records, Vol. *:9. This decree too> effect on !u%ust *3, *.23. So"e of the provisions of !"iri Decree No. -0 that are relevant to the clai"s of the co"plainants/appellants are as follo's 8italics supplied onl# for e"phasis97

!rt. 2.7 . . . A worker shall receive payment for each extra hour equivalent to his wage entitlement increased b# a "ini"u" of t'ent#/five per centum thereof for hours 'or>ed durin% the da#; and by a minimum of fifty per centum thereof for hours worked during the night 'hich shall be dee"ed to bein% fro" seven o6cloc> in the evenin% until seven o6cloc> in the "ornin%. . . . !rt. :+7 Frida# shall be dee"ed to be a 'ee>l# da# of rest on full pa#. . . . an employer may require a worker 'ith his consent to work on his weekly day of rest if circu"stances so re@uire and in respect of which an additional sum equivalent to !"#$ of his normal wage shall be paid to him. . . . !rt. :*7 . . . %hen conditions of work require the worker to work on any official holiday he shall be paid an additional sum equivalent to !"#$ of his normal wage. !rt. :17 Every worker who has completed one year&s continuous service with his employer shall be entitled to leave on full pay for a period of not less than '! days for each year increased to a period not less than '( days after five continuous years of service. ! 'or>er shall be entitled to such leave upon a quantum meruit in respect of the proportion of his service in that #ear. !rt. *+27 ! contract of e"plo#"ent "ade for a period of indefinite duration "a# be ter"inated b# either part# thereto after %ivin% the other part# thirt# da#s6 prior notice before such ter"ination, in writing, in respect of "onthl# paid 'or>ers and fifteen da#s6 notice in respect of other 'or>ers. )he party terminating a contract without giving the required notice shall pay to the other party compensation equivalent to the amount of wages

payable to the worker for the period of such notice or the unexpired portion thereof* !rt. ***7 . . . the e"plo#er concerned shall pa# to such 'or>er, upon ter"ination of e"plo#"ent, a leaving indemnity for the period of his employment calculated on the basis of fifteen days& wages for each year of the first three years of service and of one month&s wages for each year of service thereafter. Such 'or>er shall be entitled to pa#"ent of leavin% inde"nit# upon a quantum meruit in proportion to the period of his service co"pleted 'ithin a #ear. !ll the individual co"plainants/appellants have alread# been repatriated to the Philippines at the ti"e of the filin% of these cases 8R.R. No. *+1223, Rollo, pp. ,./3,9. IV The issues raised before and resolved b# the N&R) 'ere7 +irst7 F ?hether or not co"plainants are entitled to the benefits provided b# !"iri Decree No. -0 of $ahrain; 8a9 ?hether or not the co"plainants 'ho have 'or>ed in $ahrain are entitled to the above/ "entioned benefits. 8b9 ?hether or not !rt. 11 of the sa"e Decree 8alle%edl# prescribin% a "ore favorable treat"ent of alien e"plo#ees9 bars co"plainants fro" enCo#in% its benefits. ,econd7 F !ssu"in% that !"iri Decree No. -0 of $ahrain is applicable in these cases, 'hether or not co"plainants6 clai" for the benefits provided therein have prescribed. )hird7 F ?hether or not the instant cases @ualif# as a class suit. +ourth7 F ?hether or not the proceedin%s conducted b# the PO5!, as 'ell as the decision that is the subCect of these appeals, confor"ed 'ith the re@uire"ents of due process;

8a9 ?hether or not the respondent/appellant 'as denied its ri%ht to due process; 8b9 ?hether or not the ad"ission of evidence b# the PO5! after these cases 'ere sub"itted for decision 'as valid; 8c9 ?hether or not the PO5! ac@uired Curisdiction over $ro'n E Root International, Inc.; 8d9 ?hether or not the Cud%"ent a'ards are supported b# substantial evidence; 8e9 ?hether or not the a'ards based on the avera%es and for"ula presented b# the co"plainants/appellants are supported b# substantial evidence; 8f9 ?hether or not the PO5! a'arded su"s be#ond 'hat the co"plainants/appellants pra#ed for; and, if so, 'hether or not these a'ards are valid. +ifth7 F ?hether or not the PO5! erred in holdin% respondents !I$) and $ro'n E Root Cointl# are severall# liable for the Cud%"ent a'ards despite the alle%ed findin% that the for"er 'as the e"plo#er of the co"plainants; 8a9 ?hether or not the PO5! has ac@uired Curisdiction over $ro'n E Root; 8b9 ?hether or not the undisputed fact that !I$) 'as a licensed construction contractor precludes a findin% that $ro'n E Root is liable for co"plainants clai"s. ,ixth7 F ?hether or not the PO5! !d"inistrator6s failure to hold respondents in default constitutes a reversible error. ,eventh7 F ?hether or not the PO5! !d"inistrator erred in dis"issin% the follo'in% clai"s7 a. DneApired portion of contract; b. Interest earnin%s of Travel and Reserve Fund;

c. Retire"ent and Savin%s Plan benefits; d. ?ar None bonus or pre"iu" pa# of at least *++L of basic pa#; e. !rea Differential Pa#; f. !ccrued interests on all the unpaid benefits; %. Salar# differential pa#; h. ?a%e differential pa#; i. Refund of SSS pre"iu"s not re"itted to SSS; C. Refund of 'ithholdin% taA not re"itted to $IR; >. Frin%e benefits under $ E R6s 4! Su""ar# of 5"plo#ee $enefits4 8!nneA 4H4 of !"ended )o"plaint9; l. Moral and eAe"plar# da"a%es; ". !ttorne#6s fees of at least ten percent of the Cud%"ent a'ard; n. Other reliefs, li>e suspendin% and(or cancellin% the license to recruit of !I$) and the accreditation of $ E R issued b# PO5!; o. Penalt# for violations of !rticle 01 8prohibited practices9, not eAcludin% reportorial re@uire"ents thereof. Eighth7 F ?hether or not the PO5! !d"inistrator erred in not dis"issin% PO5! )ase No. 8&9 :3/3,/13+ on the %round of "ultiplicit# of suits 8 .R. Nos. *+1.**/*1, Rollo, pp. -,/-., ,*/ ,,9. !nent the first issue, N&R) set aside Section *, Rule *-. of the *.:. Revised Rules on 5vidence %overnin% the pleadin% and proof of a forei%n la' and ad"itted in evidence a si"ple cop# of the $ahrain6s !"iri Decree No. -0 of *.23 8&abour &a' for the Private Sector9. N&R) invo>ed !rticle --* of the &abor )ode of the Philippines, vestin% on the )o""ission a"ple discretion to

use ever# and all reasonable "eans to ascertain the facts in each case 'ithout re%ard to the technicalities of la' or procedure. N&R) a%reed 'ith the PO5! !d"inistrator that the !"iri Decree No. -0, bein% "ore favorable and beneficial to the 'or>ers, should for" part of the overseas e"plo#"ent contract of the co"plainants. N&R), ho'ever, held that the !"iri Decree No. -0 applied onl# to the clai"ants, 'ho 'or>ed in $ahrain, and set aside a'ards of the PO5! !d"inistrator in favor of the clai"ants, 'ho 'or>ed else'here. On the second issue, N&R) ruled that the prescriptive period for the filin% of the clai"s of the co"plainants 'as three #ears, as provided in !rticle -.* of the &abor )ode of the Philippines, and not ten #ears as provided in !rticle **11 of the )ivil )ode of the Philippines nor one #ear as provided in the !"iri Decree No. -0 of *.23. On the third issue, N&R) a%reed 'ith the PO5! !d"inistrator that the labor cases cannot be treated as a class suit for the si"ple reason that not all the co"plainants 'or>ed in $ahrain and therefore, the subCect "atter of the action, the clai"s arisin% fro" the $ahrain la', is not of co""on or %eneral interest to all the co"plainants. On the fourth issue, N&R) found at least three infractions of the cardinal rules of ad"inistrative due process7 na"el#, 8*9 the failure of the PO5! !d"inistrator to consider the evidence presented b# !I$) and $RII; 8-9 so"e findin%s of fact 'ere not supported b# substantial evidence; and 809 so"e of the evidence upon 'hich the decision 'as based 'ere not disclosed to !I$) and $RII durin% the hearin%. On the fifth issue, N&R) sustained the rulin% of the PO5! !d"inistrator that $RII and !I$) are solidaril# liable for the clai"s of the co"plainants and held that $RII 'as the actual e"plo#er of the co"plainants, or at the ver# least, the indirect e"plo#er, 'ith !I$) as the labor contractor. N&R) also held that Curisdiction over $RII 'as ac@uired b# the PO5! !d"inistrator throu%h the su""ons served on !I$), its local a%ent. On the siAth issue, N&R) held that the PO5! !d"inistrator 'as correct in den#in% the Motion to Declare !I$) in default. On the seventh issue, 'hich involved other "one# clai"s not based on the !"iri Decree No. -0, N&R) ruled7

8*9 that the PO5! !d"inistrator has no Curisdiction over the clai"s for refund of the SSS pre"iu"s and refund of 'ithholdin% taAes and the clai"ants should file their clai"s for said refund 'ith the appropriate %overn"ent a%encies; 8-9 the clai"ants failed to establish that the# are entitled to the clai"s 'hich are not based on the overseas e"plo#"ent contracts nor the !"iri Decree No. -0 of *.23; 809 that the PO5! !d"inistrator has no Curisdiction over clai"s for "oral and eAe"plar# da"a%es and nonetheless, the basis for %rantin% said da"a%es 'as not established; 819 that the clai"s for salaries correspondin% to the uneApired portion of their contract "a# be allo'ed if filed 'ithin the three/ #ear prescriptive period; 8,9 that the alle%ation that co"plainants 'ere pre"aturel# repatriated prior to the eApiration of their overseas contract 'as not established; and 839 that the PO5! !d"inistrator has no Curisdiction over the co"plaint for the suspension or cancellation of the !I$)6s recruit"ent license and the cancellation of the accreditation of $RII. N&R) passed sub silencio the last issue, the clai" that PO5! )ase No. 8&9 :3/3,/13+ should have been dis"issed on the %round that the clai"ants in said case 'ere also clai"ants in PO5! )ase No. 8&9 :1/+3/,,,. Instead of dis"issin% PO5! )ase No. 8&9 :3/3,/13+, the PO5! Cust resolved the correspondin% clai"s in PO5! )ase No. 8&9 :1/+3/,,,. In other 'ords, the PO5! did not pass upon the sa"e clai"s t'ice. V -*R* .o* !#/001 )lai"ants in .R. No. *+1223 based their petition for certiorari on the follo'in% %rounds7 8*9 that the# 'ere deprived b# N&R) and the PO5! of their ri%ht to a speed# disposition of their cases as %uaranteed b# Section *3, !rticle III of the *.:2 )onstitution. The PO5! !d"inistrator allo'ed private respondents to file their ans'ers in t'o #ears

8on =une *., *.:29 after the filin% of the ori%inal co"plaint 8on !pril -, *.:,9 and N&R), in total disre%ard of its o'n rules, affir"ed the action of the PO5! !d"inistrator; 8-9 that N&R) and the PO5! !d"inistrator should have declared !I$) and $RII in default and should have rendered su""ar# Cud%"ent on the basis of the pleadin%s and evidence sub"itted b# clai"ants; 809 the N&R) and PO5! !d"inistrator erred in not holdin% that the labor cases filed b# !I$) and $RII cannot be considered a class suit; 819 that the prescriptive period for the filin% of the clai"s is ten #ears; and 8,9 that N&R) and the PO5! !d"inistrator should have dis"issed PO5! )ase No. &/:3/+,/13+, the case filed b# !tt#. Florante de )astro 8Rollo, pp. 0*/1+9. !I$) and $RII, co""entin% on the petition in .R. No. *+1223, ar%ued7

8*9 that the# 'ere not responsible for the dela# in the disposition of the labor cases, considerin% the %reat difficult# of %ettin% all the records of the "ore than *,,++ clai"ants, the piece/"eal filin% of the co"plaints and the addition of hundreds of ne' clai"ants b# petitioners; 8-9 that considerin% the nu"ber of co"plaints and clai"ants, it 'as i"possible to prepare the ans'ers 'ithin the ten/da# period provided in the N&R) Rules, that 'hen the "otion to declare !I$) in default 'as filed on =ul# *., *.:2, said part# had alread# filed its ans'er, and that considerin% the sta%%erin% a"ount of the clai"s 8"ore than DSG,+,+++,+++.++9 and the co"plicated issues raised b# the parties, the ten/da# rule to ans'er 'as not fair and reasonable; 809 that the clai"ants failed to refute N&R)6s findin% that there 'as no co""on or %eneral interest in the subCect "atter of the controvers# F 'hich 'as the applicabilit# of the !"iri Decree No. -0. &i>e'ise, the nature of the clai"s varied, so"e bein% based on salaries pertainin% to the uneApired portion of the contracts 'hile others bein% for pure "one# clai"s. 5ach clai"ant de"anded separate clai"s peculiar onl# to hi"self and

dependin% upon the particular circu"stances obtainin% in his case; 819 that the prescriptive period for filin% the clai"s is that prescribed b# !rticle -.* of the &abor )ode of the Philippines 8three #ears9 and not the one prescribed b# !rticle **11 of the )ivil )ode of the Philippines 8ten #ears9; and 8,9 that the# are not concerned 'ith the issue of 'hether PO5! )ase No. &/:3/+,/13+ should be dis"issed, this bein% a private @uarrel bet'een the t'o labor la'#ers 8Rollo, pp. -.-/0+,9. Attorney&s 2ien On Nove"ber *-, *..-, !tt#. erardo !. del Mundo "oved to stri>e out the Coint "anifestations and "otions of !I$) and $RII dated Septe"ber - and **, *..-, clai"in% that all the clai"ants 'ho entered into the co"pro"ise a%ree"ents subCect of said "anifestations and "otions 'ere his clients and that !tt#. Florante M. de )astro had no ri%ht to represent the" in said a%ree"ents. <e also clai"ed that the clai"ants 'ere paid less than the a'ard %iven the" b# N&R); that !tt#. De )astro collected additional attorne#6s fees on top of the -,L 'hich he 'as entitled to receive; and that the consent of the clai"ants to the co"pro"ise a%ree"ents and @uitclai"s 'ere procured b# fraud 8 .R. No. *+1223, Rollo, pp. :0:/:*+9. In the Resolution dated Nove"ber -0, *..-, the )ourt denied the "otion to stri>e out the =oint Manifestations and Motions dated Septe"ber - and **, *..8 .R. Nos. *+1.**/*1, Rollo, pp. 3+:/3+.9. On Dece"ber *1, *..-, !tt#. Del Mundo filed a 4Notice and )lai" to 5nforce !ttorne#6s &ien,4 alle%in% that the clai"ants 'ho entered into co"pro"ise a%ree"ents 'ith !I$) and $RII 'ith the assistance of !tt#. De )astro, had all si%ned a retainer a%ree"ent 'ith his la' fir" 8 .R. No. *+1223, Rollo, pp. 3-0/3-1; :0:/*,0,9. Contempt of Court On Februar# *:, *..0, an o"nibus "otion 'as filed b# !tt#. Del Mundo to cite !tt#. De )astro and !tt#. KatB Tierra for conte"pt of court and for violation of )anons *, *, and *3 of the )ode of Professional Responsibilit#. The said la'#ers alle%edl# "isled this )ourt, b# "a>in% it appear that the clai"ants 'ho entered into the co"pro"ise a%ree"ents 'ere represented b# !tt#. De )astro, 'hen in fact the# 'ere represented b# !tt#. Del Mundo 8 .R. No. *+1223, Rollo, pp. *,3+/*3*19.

On Septe"ber -0, *..1, !tt#. Del Mundo reiterated his char%es a%ainst !tt#. De )astro for unethical practices and "oved for the voidin% of the @uitclai"s sub"itted b# so"e of the clai"ants. -*R* .os* !#/3!!-!/ The clai"ants in .R. Nos. *+1.**/*1 based their petition for certiorari on the %rounds that N&R) %ravel# abused its discretion 'hen it7 8*9 applied the three/#ear prescriptive period under the &abor )ode of the Philippines; and 8-9 it denied the clai"ant6s for"ula based on an avera%e overti"e pa# of three hours a da# 8Rollo, pp. *:/--9. The clai"ants ar%ue that said "ethod 'as proposed b# $RII itself durin% the ne%otiation for an a"icable settle"ent of their "one# clai"s in $ahrain as sho'n in the Me"orandu" dated !pril *3, *.:0 of the Ministr# of &abor of $ahrain 8Rollo, pp. -*/--9. $RII and !I$), in their )o""ent, reiterated their contention in .R. No. *+1223 that the prescriptive period in the &abor )ode of the Philippines, a special la', prevails over that provided in the )ivil )ode of the Philippines, a %eneral la'. !s to the "e"orandu" of the Ministr# of &abor of $ahrain on the "ethod of co"putin% the overti"e pa#, $RII and !I$) clai"ed that the# 'ere not bound b# 'hat appeared therein, because such "e"orandu" 'as proposed b# a subordinate $ahrain official and there 'as no sho'in% that it 'as approved b# the $ahrain Minister of &abor. &i>e'ise, the# clai"ed that the avera%in% "ethod 'as discussed in the course of the ne%otiation for the a"icable settle"ent of the dispute and an# offer "ade b# a part# therein could not be used as an ad"ission b# hi" 8Rollo, pp. --:/-039. -*R* .os* !#"#'3-4' In .R. Nos. *+,+-./0-, $RII and !I$) clai" that N&R) %ravel# abused its discretion 'hen it7 8*9 enforced the provisions of the !"iri Decree No. -0 of *.23 and not the ter"s of the e"plo#"ent contracts; 8-9 %ranted clai"s for holida#, overti"e and leave inde"nit# pa# and other benefits, on evidence ad"itted in contravention of petitioner6s constitutional ri%ht to due process; and 809 ordered the PO5! !d"inistrator to hold ne' hearin%s for the 3:0 clai"ants 'hose clai"s had been dis"issed for lac> of proof b# the PO5! !d"inistrator or N&R) itself. &astl#, the# alle%e that assu"in% that the !"iri Decree No. -0 of *.23 'as applicable, N&R) erred 'hen it did not appl# the one/#ear prescription provided in said la' 8Rollo, pp. -./0+9.

VI -*R* .o* !#/0015 -*R* .os* !#/3!!-!/5 -*R* .os* !#"#'3-4' !ll the petitions raise the co""on issue of prescription althou%h the# disa%reed as to the ti"e that should be e"braced 'ithin the prescriptive period. To the PO5! !d"inistrator, the prescriptive period 'as ten #ears, appl#in% !rticle **11 of the )ivil )ode of the Philippines. N&R) believed other'ise, fiAin% the prescriptive period at three #ears as provided in !rticle -.* of the &abor )ode of the Philippines. The clai"ants in .R. No. *+1223 and .R. Nos. *+1.**/*1, invo>in% different %rounds, insisted that N&R) erred in rulin% that the prescriptive period applicable to the clai"s 'as three #ears, instead of ten #ears, as found b# the PO5! !d"inistrator. The Solicitor eneral eApressed his personal vie' that the prescriptive period 'as one #ear as prescribed b# the !"iri Decree No. -0 of *.23 but he deferred to the rulin% of N&R) that !rticle -.* of the &abor )ode of the Philippines 'as the operative la'. The PO5! !d"inistrator held the vie' that7 These "one# clai"s 8under !rticle -.* of the &abor )ode9 refer to those arisin% fro" the e"plo#er6s violation of the e"plo#ee6s ri%ht as provided b# the &abor )ode. In the instant case, 'hat the respondents violated are not the ri%hts of the 'or>ers as provided b# the &abor )ode, but the provisions of the !"iri Decree No. -0 issued in $ahrain, 'hich ipso factoa"ended the 'or>er6s contracts of e"plo#"ent. Respondents consciousl# failed to confor" to these provisions 'hich specificall# provide for the increase of the 'or>er6s rate. It 'as onl# after =une 0+, *.:0, four "onths after the bro'n builders brou%ht a suit a%ainst $ E R in $ahrain for this sa"e clai", 'hen respondent !I$)6s contracts have under%one a"end"ents in $ahrain for the ne' hires(rene'als 8Respondent6s 5Ahibit 29. <ence, pre"ises considered, the applicable la' of prescription to this instant case is !rticle **11 of the )ivil )ode of the Philippines, 'hich provides7

!rt. **11. The follo'in% actions "a# be brou%ht 'ithin ten #ears fro" the ti"e the cause of action accrues7 8*9 Dpon a 'ritten contract; 8-9 Dpon an obli%ation created b# la'; Thus, herein "one# clai"s of the co"plainants a%ainst the respondents shall prescribe in ten #ears fro" !u%ust *3, *.23. Inas"uch as all clai"s 'ere filed 'ithin the ten/#ear prescriptive period, no clai" suffered the infir"it# of bein% prescribed 8 .R. No. *+1223, Rollo, :./.+9. In overrulin% the PO5! !d"inistrator, and holdin% that the prescriptive period is three #ears as provided in !rticle -.* of the &abor )ode of the Philippines, the N&R) ar%ued as follo's7 The &abor )ode provides that 4all "one# clai"s arisin% fro" e"plo#er/e"plo#ee relations . . . shall be filed 'ithin three #ears fro" the ti"e the cause of action accrued; other'ise the# shall be forever barred4 8!rt. -.*, &abor )ode, as a"ended9. This three/#ear prescriptive period shall be the one applied here and 'hich should be rec>oned fro" the date of repatriation of each individual co"plainant, considerin% the fact that the case is havin% 8sic9 filed in this countr#. ?e do not a%ree 'ith the PO5! !d"inistrator that this three/#ear prescriptive period applies onl# to "one# clai"s specificall# recoverable under the Philippine &abor )ode. !rticle -.* %ives no such indication. &i>e'ise, ?e can not consider co"plainants6 cause(s of action to have accrued fro" a violation of their e"plo#"ent contracts. There 'as no violation; the clai"s arise fro" the benefits of the la' of the countr# 'here the# 'or>ed. 8 .R. No. *+1223, Rollo, pp. .+/.*9. !nent the applicabilit# of the one/#ear prescriptive period as provided b# the !"iri Decree No. -0 of *.23, N&R) opined that the applicabilit# of said la' 'as one of characteriBation, i.e., 'hether to characteriBe the forei%n la' on prescription or statute of li"itation as 4substantive4 or 4procedural.4 N&R) cited the decision in 6ournias v* Atlantic 7aritime Company 8--+ F. -d. *,-, -d )ir. I*.,,J, 'here the issue 'as the applicabilit# of the Pana"a &abor )ode in a case filed in the State of Ne' Mor> for clai"s arisin% fro" said )ode. In said case, the clai"s 'ould have prescribed under the Pana"anian

&a' but not under the Statute of &i"itations of Ne' Mor>. The D.S. )ircuit )ourt of !ppeals held that the Pana"anian &a' 'as procedural as it 'as not 4specificall# intended to be substantive,4 hence, the prescriptive period provided in the la' of the foru" should appl#. The )ourt observed7 . . . !nd 'here, as here, 'e are dealin% 'ith a statute of li"itations of a forei%n countr#, and it is not clear on the face of the statute that its purpose 'as to li"it the enforceabilit#, outside as 'ell as 'ithin the forei%n countr# concerned, of the substantive ri%hts to 'hich the statute pertains, 'e thin> that as a #ardstic> for deter"inin% 'hether that 'as the purpose this test is the "ost satisfactor# one. It does not lead !"erican courts into the necessit# of eAa"inin% into the unfa"iliar peculiarities and refine"ents of different forei%n le%al s#ste"s. . . The court further noted7 AAA AAA AAA !ppl#in% that test here it appears to us that the libelant is entitled to succeed, for the respondents have failed to satisf# us that the Pana"anian period of li"itation in @uestion 'as specificall# ai"ed a%ainst the particular ri%hts 'hich the libelant see>s to enforce. The Pana"a &abor )ode is a statute havin% broad obCectives, viB7 4The present )ode re%ulates the relations bet'een capital and labor, placin% the" on a basis of social Custice, so that, 'ithout inCurin% an# of the parties, there "a# be %uaranteed for labor the necessar# conditions for a nor"al life and to capital an e@uitable return to its invest"ent.4 In pursuance of these obCectives the )ode %ives laborers various ri%hts a%ainst their e"plo#ers. !rticle 3-0 establishes the period of li"itation for all such ri%hts, eAcept certain ones 'hich are enu"erated in !rticle 3-*. !nd there is nothin% in the record to indicate that the Pana"anian le%islature %ave special consideration to the i"pact of !rticle 3-0 upon the particular ri%hts sou%ht to be enforced here, as distin%uished fro" the other ri%hts to 'hich that !rticle is also applicable. ?ere 'e confronted 'ith the @uestion of 'hether the li"itation period of !rticle 3-* 8'hich carves out particular ri%hts to be %overned b# a shorter li"itation period9 is to be re%arded as 4substantive4 or 4procedural4 under the rule of 4specifit#4 'e "i%ht have a different case; but here on the surface of thin%s 'e appear to be dealin% 'ith a 4broad,4 and not a 4specific,4 statute of li"itations

8 .R. No. *+1223, Rollo, pp. .-/.19. )lai"ants in .R. Nos. *+1.**/*1 are of the vie' that !rticle -.* of the &abor )ode of the Philippines, 'hich 'as applied b# N&R), refers onl# to clai"s 4arisin% fro" the e"plo#er6s violation of the e"plo#ee6s ri%ht as provided b# the &abor )ode.4 The# assert that their clai"s are based on the violation of their e"plo#"ent contracts, as a"ended b# the !"iri Decree No. -0 of *.23 and therefore the clai"s "a# be brou%ht 'ithin ten #ears as provided b# !rticle **11 of the )ivil )ode of the Philippines 8 Rollo, .R. Nos. *+1.**/*1, pp. *:/-*9. To bolster their contention, the# cite PA2EA v* Philippine Airlines 8nc., 2+ S)R! -11 8*.239. !I$) and $RII, insistin% that the actions on the clai"s have prescribed under the !"iri Decree No. -0 of *.23, ar%ue that there is in force in the Philippines a 4borro'in% la',4 'hich is Section 1: of the )ode of )ivil Procedure and that 'here such >ind of la' eAists, it ta>es precedence over the co""on/la' conflicts rule 8 .R. No. *+1223, Rollo, pp. 1,/139. First to be deter"ined is 'hether it is the $ahrain la' on prescription of action based on the !"iri Decree No. -0 of *.23 or a Philippine la' on prescription that shall be the %overnin% la'. !rticle *,3 of the !"iri Decree No. -0 of *.23 provides7 ! clai" arisin% out of a contract of e"plo#"ent shall not be actionable after the lapse of one #ear fro" the date of the eApir# of the contract. 8 .R. Nos. *+,+-./0*, Rollo, p. --39. !s a %eneral rule, a forei%n procedural la' 'ill not be applied in the foru". Procedural "atters, such as service of process, Coinder of actions, period and re@uisites for appeal, and so forth, are %overned b# the la's of the foru". This is true even if the action is based upon a forei%n substantive la' 8Restate"ent of the )onflict of &a's, Sec. 3:,; Salon%a, Private International &a', *0* I*.2.J9. ! la' on prescription of actions is sui generis in )onflict of &a's in the sense that it "a# be vie'ed either as procedural or substantive, dependin% on the characteriBation %iven such a la'. Thus in 6ournias v* Atlantic 7aritime Company supra the !"erican court applied the statute of li"itations of Ne' Mor>, instead of the Pana"anian la', after findin% that there 'as no sho'in% that the Pana"anian la' on

prescription 'as intended to be substantive. $ein% considered "erel# a procedural la' even in Pana"a, it has to %ive 'a# to the la' of the foru" on prescription of actions. <o'ever, the characteriBation of a statute into a procedural or substantive la' beco"es irrelevant 'hen the countr# of the foru" has a 4borro'in% statute.4 Said statute has the practical effect of treatin% the forei%n statute of li"itation as one of substance 8 oodrich, )onflict of &a's *,-/*,0 I*.0:J9. ! 4borro'in% statute4 directs the state of the foru" to appl# the forei%n statute of li"itations to the pendin% clai"s based on a forei%n la' 8Sie%el, )onflicts, *:0 I*.2,J9. ?hile there are several >inds of 4borro'in% statutes,4 one for" provides that an action barred b# the la's of the place 'here it accrued, 'ill not be enforced in the foru" even thou%h the local statute has not run a%ainst it 8 oodrich and Scoles, )onflict of &a's, *,-/ *,0 I*.0:J9. Section 1: of our )ode of )ivil Procedure is of this >ind. Said Section provides7 If b# the la's of the state or countr# 'here the cause of action arose, the action is barred, it is also barred in the Philippines Islands. Section 1: has not been repealed or a"ended b# the )ivil )ode of the Philippines. !rticle --2+ of said )ode repealed onl# those provisions of the )ode of )ivil Procedures as to 'hich 'ere inconsistent 'ith it. There is no provision in the )ivil )ode of the Philippines, 'hich is inconsistent 'ith or contradictor# to Section 1: of the )ode of )ivil Procedure 8Paras, Philippine )onflict of &a's *+1 I2th ed.J9. In the li%ht of the *.:2 )onstitution, ho'ever, Section 1: cannot be enforced ex proprio vigore insofar as it ordains the application in this Curisdiction of Section *,3 of the !"iri Decree No. -0 of *.23. The courts of the foru" 'ill not enforce an# forei%n clai" obnoAious to the foru"6s public polic# 8)anadian Northern Rail'a# )o. v. 5%%en, -,- D.S. ,,0, 1+ S. )t. 1+-, 31 &. ed. 2*0 I*.-+J9. To enforce the one/#ear prescriptive period of the !"iri Decree No. -0 of *.23 as re%ards the clai"s in @uestion 'ould contravene the public polic# on the protection to labor. In the Declaration of Principles and State Policies, the *.:2 )onstitution e"phasiBed that7 The state shall pro"ote social Custice in all phases of national develop"ent. 8Sec. *+9.

The state affir"s labor as a pri"ar# social econo"ic force. It shall protect the ri%hts of 'or>ers and pro"ote their 'elfare 8Sec. *:9. In article OIII on Social =ustice and <u"an Ri%hts, the *.:2 )onstitution provides7 Sec. 0. The State shall afford full protection to labor, local and overseas, or%aniBed and unor%aniBed, and pro"ote full e"plo#"ent and e@ualit# of e"plo#"ent opportunities for all. <avin% deter"ined that the applicable la' on prescription is the Philippine la', the neAt @uestion is 'hether the prescriptive period %overnin% the filin% of the clai"s is three #ears, as provided b# the &abor )ode or ten #ears, as provided b# the )ivil )ode of the Philippines. The clai"ants are of the vie' that the applicable provision is !rticle **11 of the )ivil )ode of the Philippines, 'hich provides7 The follo'in% actions "ust be brou%ht 'ithin ten #ears fro" the ti"e the ri%ht of action accrues7 8*9 Dpon a 'ritten contract; 8-9 Dpon an obli%ation created b# la'; 809 Dpon a Cud%"ent. N&R), on the other hand, believes that the applicable provision is !rticle -.* of the &abor )ode of the Philippines, 'hich in pertinent part provides7 Mone# clai"s/all "one# clai"s arisin% fro" e"plo#er/e"plo#ee relations accruin% durin% the effectivit# of this )ode shall be filed 'ithin three 809 #ears fro" the ti"e the cause of action accrued, other'ise the# shall be forever barred. AAA AAA AAA The case of Philippine Air 2ines Employees Association v* Philippine Air 2ines 8nc*, 2+ S)R! -11 8*.239 invo>ed b# the clai"ants in .R. Nos. *+1.**/*1 is inapplicable to the cases at bench 8Rollo, p. -*9. The said case involved the correct co"putation of overti"e pa# as provided in the collective bar%ainin% a%ree"ents and not the 5i%ht/<our &abor &a'.

!s noted b# the )ourt7 4That is precisel# 'h# petitioners did not "a>e an# reference as to the co"putation for overti"e 'or> under the 5i%ht/<our &abor &a' 8Secs. 0 and 1, )! No. 1.19 and instead insisted that 'or> co"putation provided in the collective bar%ainin% a%ree"ents bet'een the parties be observed. Since the clai" for pa# differentials is pri"aril# anchored on the 'ritten contracts bet'een the liti%ants, the ten/#ear prescriptive period provided b# !rt. **118*9 of the Ne' )ivil )ode should %overn.4 Section 2/a of the 5i%ht/<our &abor &a' 8)! No. 111 as a"ended b# R.!. No. *..009 provides7 !n# action to enforce an# cause of action under this !ct shall be co""enced 'ithin three #ears after the cause of action accrued other'ise such action shall be forever barred, . . . . The court further eAplained7 The three/#ear prescriptive period fiAed in the 5i%ht/<our &abor &a' 8)! No. 111 as a"ended9 'ill appl#, if the clai" for differentials for overti"e 'or> is solel# based on said la', and not on a collective bar%ainin% a%ree"ent or an# other contract. In the instant case, the clai" for overti"e co"pensation is not so "uch because of )o""on'ealth !ct No. 111, as a"ended but because the clai" is de"andable ri%ht of the e"plo#ees, b# reason of the above/"entioned collective bar%ainin% a%ree"ent. Section 2/a of the 5i%ht/<our &abor &a' provides the prescriptive period for filin% 4actions to enforce an# cause of action under said la'.4 On the other hand, !rticle -.* of the &abor )ode of the Philippines provides the prescriptive period for filin% 4"one# clai"s arisin% fro" e"plo#er/e"plo#ee relations.4 The clai"s in the cases at bench all arose fro" the e"plo#er/ e"plo#ee relations, 'hich is broader in scope than clai"s arisin% fro" a specific la' or fro" the collective bar%ainin% a%ree"ent. The contention of the PO5! !d"inistrator, that the three/#ear prescriptive period under !rticle -.* of the &abor )ode of the Philippines applies onl# to "one# clai"s specificall# recoverable under said )ode, does not find support in the plain lan%ua%e of the provision. Neither is the contention of the clai"ants in .R. Nos. *+1.**/*1 that said !rticle refers onl# to clai"s 4arisin% fro" the e"plo#er6s violation of the e"plo#ee6s ri%ht,4 as provided b# the &abor )ode supported b# the facial readin% of the provision. VII

-*R* .o* !#/001 !. !s to the first t'o %rounds for the petition in .R. No. *+1223, clai"ants aver7 8*9 that 'hile their co"plaints 'ere filed on =une 3, *.:1 'ith PO5!, the case 'as decided onl# on =anuar# 0+, *.:., a clear denial of their ri%ht to a speed# disposition of the case; and 8-9 that N&R) and the PO5! !d"inistrator should have declared !I$) and $RII in default 8Rollo, pp. 0*/0,9. )lai"ants invo>e a ne' provision incorporated in the *.:2 )onstitution, 'hich provides7 Sec. *3. !ll persons shall have the ri%ht to a speed# disposition of their cases before all Cudicial, @uasi/Cudicial, or ad"inistrative bodies. It is true that the constitutional ri%ht to 4a speed# disposition of cases4 is not li"ited to the accused in cri"inal proceedin%s but eAtends to all parties in all cases, includin% civil and ad"inistrative cases, and in all proceedin%s, includin% Cudicial and @uasi/Cudicial hearin%s. <ence, under the )onstitution, an# part# to a case "a# de"and eApeditious action on all officials 'ho are tas>ed 'ith the ad"inistration of Custice. <o'ever, as held in Caballero v* Alfonso 9r., *,0 S)R! *,0 8*.:29, 4speed# disposition of cases4 is a relative ter". =ust li>e the constitutional %uarantee of 4speed# trial4 accorded to the accused in all cri"inal proceedin%s, 4speed# disposition of cases4 is a fleAible concept. It is consistent 'ith dela#s and depends upon the circu"stances of each case. ?hat the )onstitution prohibits are unreasonable, arbitrar# and oppressive dela#s 'hich render ri%hts nu%ator#. Caballero laid do'n the factors that "a# be ta>en into consideration in deter"inin% 'hether or not the ri%ht to a 4speed# disposition of cases4 has been violated, thus7 In the deter"ination of 'hether or not the ri%ht to a 4speed# trial4 has been violated, certain factors "a# be considered and balanced a%ainst each other. These are len%th of dela#, reason for the dela#, assertion of the ri%ht or failure to assert it, and preCudice caused b# the dela#. The sa"e factors "a# also be considered in ans'erin% Cudicial in@uir# 'hether or not a person officiall# char%ed 'ith the ad"inistration of Custice has violated the speed# disposition of cases.

&i>e'ise, in -on:ales v* ,andiganbayan, *.. S)R! -.:, 8*..*9, 'e held7 It "ust be here e"phasiBed that the ri%ht to a speed# disposition of a case, li>e the ri%ht to speed# trial, is dee"ed violated onl# 'hen the proceedin% is attended b# veAatious, capricious, and oppressive dela#s; or 'hen unCustified postpone"ents of the trial are as>ed for and secured, or 'hen 'ithout cause or Custified "otive a lon% period of ti"e is allo'ed to elapse 'ithout the part# havin% his case tried. Since =ul# -,, *.:1 or a "onth after !I$) and $RII 'ere served 'ith a cop# of the a"ended co"plaint, clai"ants had been as>in% that !I$) and $RII be declared in default for failure to file their ans'ers 'ithin the ten/da# period provided in Section *, Rule III of $oo> VI of the Rules and Re%ulations of the PO5!. !t that ti"e, there 'as a pendin% "otion of !I$) and $RII to stri>e out of the records the a"ended co"plaint and the 4)o"pliance4 of clai"ants to the order of the PO5!, re@uirin% the" to sub"it a bill of particulars. The cases at bench are not of the run/of/the/"ill variet#, such that their final disposition in the ad"inistrative level after seven #ears fro" their inception, cannot be said to be attended b# unreasonable, arbitrar# and oppressive dela#s as to violate the constitutional ri%hts to a speed# disposition of the cases of co"plainants. The a"ended co"plaint filed on =une 3, *.:1 involved a total of *,232 clai"ants. Said co"plaint had under%one several a"end"ents, the first bein% on !pril 0, *.:,. The clai"ants 'ere hired on various dates fro" *.2, to *.:0. The# 'ere deplo#ed in different areas, one %roup in and the other %roups outside of, $ahrain. The "onetar# clai"s totallin% "ore than DSG3, "illion accordin% to !tt#. Del Mundo, included7 *. DneApired portion of contract; -. Interest earnin%s of Travel and Fund; 0. Retire"ent and Savin%s Plan benefit; 1. ?ar None bonus or pre"iu" pa# of at least *++L of basic pa#; ,. !rea Differential pa#;

3. !ccrued Interest of all the unpaid benefits; 2. Salar# differential pa#; :. ?a%e Differential pa#; .. Refund of SSS pre"iu"s not re"itted to Social Securit# S#ste"; *+. Refund of ?ithholdin% TaA not re"itted to $ureau of Internal Revenue 8$.I.R.9; **. Frin%e $enefits under $ro'n E Root6s 4! Su""ar# of 5"plo#ees $enefits consistin% of 10 pa%es 8!nneA 4H4 of !"ended )o"plaint9; *-. Moral and 5Ae"plar# Da"a%es; *0. !ttorne#6s fees of at least ten percent of a"ounts; *1. Other reliefs, li>e suspendin% and(or cancellin% the license to recruit of !I$) and issued b# the PO5!; and *,. Penalt# for violation of !rticle 01 8Prohibited practices9 not eAcludin% reportorial re@uire"ents thereof 8N&R) Resolution, Septe"ber -, *..*, pp. *:/*.; .R. No. *+1223, Rollo, pp. 20/ 219. Inas"uch as the co"plaint did not alle%e 'ith sufficient definiteness and clarit# of so"e facts, the clai"ants 'ere ordered to co"pl# 'ith the "otion of !I$) for a bill of particulars. ?hen clai"ants filed their 4)o"pliance and Manifestation,4 !I$) "oved to stri>e out the co"plaint fro" the records for failure of clai"ants to sub"it a proper bill of particulars. ?hile the PO5! !d"inistrator denied the "otion to stri>e out the co"plaint, he ordered the clai"ants 4to correct the deficiencies4 pointed out b# !I$). $efore an intelli%ent ans'er could be filed in response to the co"plaint, the records of e"plo#"ent of the "ore than *,2++ clai"ants had to be retrieved fro" various countries in the Middle 5ast. So"e of the records dated as far bac> as *.2,. The hearin%s on the "erits of the clai"s before the PO5! !d"inistrator 'ere interrupted several ti"es b# the various appeals, first to N&R) and then to the Supre"e )ourt.

!side fro" the inclusion of additional clai"ants, t'o ne' cases 'ere filed a%ainst !I$) and $RII on October *+, *.:, 8PO5! )ases Nos. &/:,/*+/222 and &/:,/*+/22.9. !nother co"plaint 'as filed on Ma# -., *.:3 8PO5! )ase No. &/:3/+,/13+9. N&R), in eAasperation, noted that the eAact nu"ber of clai"ants had never been co"pletel# established 8Resolution, Sept. -, *..*, .R. No. *+1223, Rollo, p. ,29. !ll the three ne' cases 'ere consolidated 'ith PO5! )ase No. &/:1/+3/,,,. N&R) bla"ed the parties and their la'#ers for the dela# in ter"inatin% the proceedin%s, thus7 These cases could have been spared the lon% and arduous route to'ards resolution had the parties and their counsel been "ore interested in pursuin% the truth and the "erits of the clai"s rather than eAhibitin% a fanatical reliance on technicalities. Parties and counsel have "ade these cases a liti%ation of e"otion. The intransi%ence of parties and counsel is re"ar>able. !s late as last "onth, this )o""ission "ade a last and final atte"pt to brin% the counsel of all the parties 8this )o""ission issued a special order directin% respondent $ro'n E Root6s resident a%ent(s to appear9 to co"e to a "ore conciliator# stance. 5ven this failed 8Rollo, p. ,:9. The s@uabble bet'een the la'#ers of clai"ants added to the dela# in the disposition of the cases, to the la"ent of N&R), 'hich co"plained7 It is ver# evident fro" the records that the prota%onists in these consolidated cases appear to be not onl# the individual co"plainants, on the one hand, and !I$) and $ro'n E Root, on the other hand. The t'o la'#ers for the co"plainants, !tt#. erardo Del Mundo and !tt#. Florante De )astro, have #et to settle the ri%ht of representation, each one persistentl# clai"in% to appear in behalf of "ost of the co"plainants. !s a result, there are t'o appeals b# the co"plainants. !tte"pts b# this )o""ission to resolve counsels6 conflictin% clai"s of their respective authorit# to represent the co"plainants prove futile. The bic>erin%s b# these t'o counsels are reflected in their pleadin%s. In the char%es and counterchar%es of falsification of docu"ents and si%natures, and in the disbar"ent proceedin%s b# one a%ainst the other. !ll these have, to a lar%e eAtent, abetted in confoundin% the issues raised in these cases, Cu"ble the presentation of evidence, and even derailed the prospects of an a"icable settle"ent. It 'ould not be far/fetched to i"a%ine

that both counsel, un'ittin%l#, perhaps, painted a rainbo' for the co"plainants, 'ith the proverbial pot of %old at its end containin% "ore than DSG*++ "illion, the a%%re%ate of the clai"s in these cases. It is, li>e'ise, not i"probable that their "isplaced Beal and eAuberance caused the" to thro' all caution to the 'ind in the "atter of ele"entar# rules of procedure and evidence 8Rollo, pp. ,:/,.9. !ddin% to the confusion in the proceedin%s before N&R), is the listin% of so"e of the co"plainants in both petitions filed b# the t'o la'#ers. !s noted b# N&R), 4the proble" created b# this situation is that if one of the t'o petitions is dis"issed, then the parties and the public respondents 'ould not >no' 'hich clai" of 'hich petitioner 'as dis"issed and 'hich 'as not.4 $. )lai"ants insist that all their clai"s could properl# be consolidated in a 4class suit4 because 4all the na"ed co"plainants have si"ilar "one# clai"s and si"ilar ri%hts sou%ht irrespective of 'hether the# 'or>ed in $ahrain, Dnited !rab 5"irates or in !bu Dhabi, &ib#a or in an# part of the Middle 5ast4 8Rollo, pp. 0,/0:9. ! class suit is proper 'here the subCect "atter of the controvers# is one of co""on or %eneral interest to "an# and the parties are so nu"erous that it is i"practicable to brin% the" all before the court 8Revised Rules of )ourt, Rule 0, Sec. *-9. ?hile all the clai"s are for benefits %ranted under the $ahrain &a', "an# of the clai"ants 'or>ed outside $ahrain. So"e of the clai"ants 'ere deplo#ed in Indonesia and Mala#sia under different ter"s and conditions of e"plo#"ent. N&R) and the PO5! !d"inistrator are correct in their stance that inas"uch as the first re@uire"ent of a class suit is not present 8co""on or %eneral interest based on the !"iri Decree of the State of $ahrain9, it is onl# lo%ical that onl# those 'ho 'or>ed in $ahrain shall be entitled to file their clai"s in a class suit. ?hile there are co""on defendants 8!I$) and $RII9 and the nature of the clai"s is the sa"e 8for e"plo#ee6s benefits9, there is no co""on @uestion of la' or fact. ?hile so"e clai"s are based on the !"iri &a' of $ahrain, "an# of the clai"ants never 'or>ed in that countr#, but 'ere deplo#ed else'here. Thus, each clai"ant is interested onl# in his o'n de"and and not in the clai"s of the other e"plo#ees of defendants. The na"ed clai"ants have a special or particular interest in specific benefits co"pletel# different fro" the benefits in 'hich the other na"ed clai"ants and those included as

"e"bers of a 4class4 are clai"in% 8$erses v. Villanueva, -, Phil. 120 I*.*0J9. It appears that each clai"ant is onl# interested in collectin% his o'n clai"s. ! clai"ants has no concern in protectin% the interests of the other clai"ants as sho'n b# the fact, that hundreds of the" have abandoned their co/clai"ants and have entered into separate co"pro"ise settle"ents of their respective clai"s. ! principle basic to the concept of 4class suit4 is that plaintiffs brou%ht on the record "ust fairl# represent and protect the interests of the others 8Di"a#u%a v. )ourt of Industrial Relations, *+* Phil. ,.+ I*.,2J9. For this "atter, the clai"ants 'ho 'or>ed in $ahrain can not be allo'ed to sue in a class suit in a Cudicial proceedin%. The "ost that can be accorded to the" under the Rules of )ourt is to be allo'ed to Coin as plaintiffs in one co"plaint 8Revised Rules of )ourt, Rule 0, Sec. 39. The )ourt is eAtra/cautious in allo'in% class suits because the# are the eAceptions to the condition sine qua non, re@uirin% the Coinder of all indispensable parties. In an i"properl# instituted class suit, there 'ould be no proble" if the decision secured is favorable to the plaintiffs. The proble" arises 'hen the decision is adverse to the", in 'hich case the others 'ho 'ere i"pleaded b# their self/appointed representatives, 'ould surel# clai" denial of due process. ). The clai"ants in .R. No. *+1223 also ur%ed that the PO5! !d"inistrator and N&R) should have declared !tt#. Florante De )astro %uilt# of 4foru" shoppin%, a"bulance chasin% activities, falsification, duplicit# and other unprofessional activities4 and his appearances as counsel for so"e of the clai"ants as ille%al 8Rollo, pp. 0:/1+9. The !nti/Foru" Shoppin% Rule 8Revised )ircular No. -:/.*9 is intended to put a stop to the practice of so"e parties of filin% "ultiple petitions and co"plaints involvin% the sa"e issues, 'ith the result that the courts or a%encies have to resolve the sa"e issues. Said Rule, ho'ever, applies onl# to petitions filed 'ith the Supre"e )ourt and the )ourt of !ppeals. It is entitled 4!dditional Re@uire"ents For Petitions Filed 'ith the Supre"e )ourt and the )ourt of !ppeals To Prevent Foru" Shoppin% or Multiple Filin% of Petitioners and )o"plainants.4 The first sentence of the circular eApressl# states that said circular applies to an %overns the filin% of petitions in the Supre"e )ourt and the )ourt of !ppeals. ?hile !d"inistrative )ircular No. +1/.1 eAtended the application of the anti/ foru" shoppin% rule to the lo'er courts and ad"inistrative a%encies, said circular too> effect onl# on !pril *, *..1.

PO5! and N&R) could not have entertained the co"plaint for unethical conduct a%ainst !tt#. De )astro because N&R) and PO5! have no Curisdiction to investi%ate char%es of unethical conduct of la'#ers. Attorney&s 2ien The 4Notice and )lai" to 5nforce !ttorne#6s &ien4 dated Dece"ber *1, *..'as filed b# !tt#. erardo !. Del Mundo to protect his clai" for attorne#6s fees for le%al services rendered in favor of the clai"ants 8 .R. No. *+1223, Rollo, pp. :1*/:119. ! state"ent of a clai" for a char%in% lien shall be filed 'ith the court or ad"inistrative a%enc# 'hich renders and eAecutes the "one# Cud%"ent secured b# the la'#er for his clients. The la'#er shall cause 'ritten notice thereof to be delivered to his clients and to the adverse part# 8Revised Rules of )ourt, Rule *0:, Sec. 029. The state"ent of the clai" for the char%in% lien of !tt#. Del Mundo should have been filed 'ith the ad"inistrative a%enc# that rendered and eAecuted the Cud%"ent. Contempt of Court The co"plaint of !tt#. erardo !. Del Mundo to cite !tt#. Florante De )astro and !tt#. KatB Tierra for violation of the )ode of Professional Responsibilit# should be filed in a separate and appropriate proceedin%. -*R* .o* !#/3!!-!/ )lai"ants char%e N&R) 'ith %rave abuse of discretion in not acceptin% their for"ula of 4Three <ours !vera%e Dail# Overti"e4 in co"putin% the overti"e pa#"ents. The# clai" that it 'as $RII itself 'hich proposed the for"ula durin% the ne%otiations for the settle"ent of their clai"s in $ahrain and therefore it is in estoppel to disclai" said offer 8Rollo, pp. -*/--9. )lai"ants presented a Me"orandu" of the Ministr# of &abor of $ahrain dated !pril *3, *.:0, 'hich in pertinent part states7 !fter the perusal of the "e"orandu" of the ;ice President and the Area 7anager 7iddle East of 6rown < Root Co. and the Su""ar# of the co"pensation offered b# the )o"pan# to the e"plo#ees in respect of the difference of pa# of the 'a%es of the overti"e and the difference of vacation leave and the perusal of the docu"ents attached thereto i.e., "inutes of the "eetin%s bet'een the Representative of the e"plo#ees and the "ana%e"ent of the )o"pan#, the co"plaint filed b# the

e"plo#ees on *1(-(:0 'here the# have clai"ed as hereinabove stated, sa"ple of the Service )ontract eAecuted bet'een one of the e"plo#ees and the co"pan# throu%h its agent in 8sic9Philippines Asia 8nternational 6uilders Corporation 'here it has been provided for 1: hours of 'or> per 'ee> and an annual leave of *- da#s and an overtime wage of ! < !=/ of the normal hourly wage. AAA AAA AAA The )o"pan# in its co"putation reached the follo'in% avera%es7 !. *. The avera%e duration of the actual service of the e"plo#ee is 0, "onths for the Philippino 8sic9 e"plo#ees . . . . -. The avera%e 'a%e per hour for the Philippino 8sic9 e"plo#ee is DSG-.3. . . . . 0. )he average hours for the overtime is 4 hours plus in all public holidays and weekends. 1. Payment of >,?(*0' per months @sicA of service as compensation for the difference of the wages of the overti"e done for each Philippino 8sic9 e"plo#ee . . . 8 Rollo, p.--9. $RII and !I$) countered7 8*9 that the Me"orandu" 'as not prepared b# the" but b# a subordinate official in the $ahrain Depart"ent of &abor; 8-9 that there 'as no sho'in% that the $ahrain Minister of &abor had approved said "e"orandu"; and 809 that the offer 'as "ade in the course of the ne%otiation for an a"icable settle"ent of the clai"s and therefore it 'as not ad"issible in evidence to prove that an#thin% is due to the clai"ants. ?hile said docu"ent 'as presented to the PO5! 'ithout observin% the rule on presentin% official docu"ents of a forei%n %overn"ent as provided in Section -1, Rule *0- of the *.:. Revised Rules on 5vidence, it can be ad"itted in evidence in proceedin%s before an ad"inistrative bod#. The opposin% parties have a cop# of the said "e"orandu", and the# could easil# verif# its authenticit# and accurac#. The ad"issibilit# of the offer of co"pro"ise "ade b# $RII as contained in the "e"orandu" is another "atter. Dnder Section -2, Rule *0+ of the *.:. Revised Rules on 5vidence, an offer to settle a clai" is not an ad"ission that an#thin% is due.

Said Rule provides7 Offer of co"pro"ise not ad"issible. F In civil cases, an offer of co"pro"ise is not an ad"ission of an# liabilit#, and is not ad"issible in evidence a%ainst the offeror. This Rule is not onl# a rule of procedure to avoid the clutterin% of the record 'ith un'anted evidence but a state"ent of public polic#. There is %reat public interest in havin% the prota%onists settle their differences a"icable before these ripen into liti%ation. 5ver# effort "ust be ta>en to encoura%e the" to arrive at a settle"ent. The sub"ission of offers and counter/offers in the ne%otiation table is a step in the ri%ht direction. $ut to bind a part# to his offers, as 'hat clai"ants 'ould "a>e this )ourt do, 'ould defeat the salutar# purpose of the Rule. -*R* .os* !#"#'3-4' !. N&R) applied the !"iri Decree No. -0 of *.23, 'hich provides for %reater benefits than those stipulated in the overseas/e"plo#"ent contracts of the clai"ants. It 'as of the belief that 4'here the la's of the host countr# are "ore favorable and beneficial to the 'or>ers, then the la's of the host countr# shall for" part of the overseas e"plo#"ent contract.4 It @uoted 'ith approval the observation of the PO5! !d"inistrator that 4. . . in labor proceedin%s, all doubts in the i"ple"entation of the provisions of the &abor )ode and its i"ple"entin% re%ulations shall be resolved in favor of labor4 8Rollo, pp. .+/.19. !I$) and $RII clai" that N&R) acted capriciousl# and 'hi"sicall# 'hen it refused to enforce the overseas/e"plo#"ent contracts, 'hich beca"e the la' of the parties. The# contend that the principle that a la' is dee"ed to be a part of a contract applies onl# to provisions of Philippine la' in relation to contracts eAecuted in the Philippines. The overseas/e"plo#"ent contracts, 'hich 'ere prepared b# !I$) and $RII the"selves, provided that the la's of the host countr# beca"e applicable to said contracts if the# offer ter"s and conditions "ore favorable that those stipulated therein. It 'as stipulated in said contracts that7 The 5"plo#ee a%rees that 'hile in the e"plo# of the 5"plo#er, he 'ill not en%a%e in an# other business or occupation, nor see> e"plo#"ent 'ith an#one other than the 5"plo#er; that he shall devote his entire ti"e and attention and his best ener%ies, and abilities to the perfor"ance of such duties as "a# be assi%ned to hi" b# the 5"plo#er; that he shall at all ti"es be subCect to the

direction and control of the 5"plo#er; and that the benefits provided to 5"plo#ee hereunder are substituted for and in lieu of all other benefits provided b# an# applicable la', provided of course that total remuneration and benefits do not fall below that of the host country regulation or custom it being understood that should applicable laws establish that fringe benefits or other such benefits additional to the compensation herein agreed cannot be waived, 5"plo#ee a%rees that such co"pensation 'ill be adCusted do'n'ard so that the total co"pensation hereunder, plus the non/'aivable benefits shall be e@uivalent to the co"pensation herein a%reed 8Rollo, pp. 0,-/ 0,09. The overseas/e"plo#"ent contracts could have been drafted "ore felicitousl#. ?hile a part thereof provides that the co"pensation to the e"plo#ee "a# be 4adCusted do'n'ard so that the total co"putation 8thereunder9 plus the non/'aivable benefits shall be e@uivalent to the co"pensation4 therein a%reed, another part of the sa"e provision cate%oricall# states 4that total re"uneration and benefits do not fall belo' that of the host countr# re%ulation and custo".4 !n# a"bi%uit# in the overseas/e"plo#"ent contracts should be interpreted a%ainst !I$) and $RII, the parties that drafted it 85astern Shippin% &ines, Inc. v. Mar%arine/Ver>aufs/Dnion, .0 S)R! -,2 I*.2.J9. !rticle *022 of the )ivil )ode of the Philippines provides7 The interpretation of obscure 'ords or stipulations in a contract shall not favor the part# 'ho caused the obscurit#. Said rule of interpretation is applicable to contracts of adhesion 'here there is alread# a prepared for" containin% the stipulations of the e"plo#"ent contract and the e"plo#ees "erel# 4ta>e it or leave it.4 The presu"ption is that there 'as an i"position b# one part# a%ainst the other and that the e"plo#ees si%ned the contracts out of necessit# that reduced their bar%ainin% po'er 8Field"en6s Insurance )o., Inc. v. Son%co, -, S)R! 2+ I*.3:J9. !ppl#in% the said le%al precepts, 'e read the overseas/e"plo#"ent contracts in @uestion as adoptin% the provisions of the !"iri Decree No. -0 of *.23 as part and parcel thereof. The parties to a contract "a# select the la' b# 'hich it is to be %overned 8)heshire, Private International &a', *:2 I2th ed.J9. In such a case, the

forei%n la' is adopted as a 4s#ste"4 to re%ulate the relations of the parties, includin% @uestions of their capacit# to enter into the contract, the for"alities to be observed b# the", "atters of perfor"ance, and so forth 8*3 !" =ur -d, *,+/*3*9. Instead of adoptin% the entire "ass of the forei%n la', the parties "a# Cust a%ree that specific provisions of a forei%n statute shall be dee"ed incorporated into their contract 4as a set of ter"s.4 $# such reference to the provisions of the forei%n la', the contract does not beco"e a forei%n contract to be %overned b# the forei%n la'. The said la' does not operate as a statute but as a set of contractual ter"s dee"ed 'ritten in the contract 8!nton, Private International &a', *.2 I*.32J; Dice# and Morris, The )onflict of &a's, 2+-/2+0, I:th ed.J9. ! basic polic# of contract is to protect the eApectation of the parties 8Reese, )hoice of &a' in Torts and )ontracts, *3 )olu"bia =ournal of Transnational &a' *, -* I*.22J9. Such part# eApectation is protected b# %ivin% effect to the parties6 o'n choice of the applicable la' 8Fric>e v. Isbrandtsen )o., Inc., *,* F. Supp. 13,, 132 I*.,2J9. The choice of la' "ust, ho'ever, bear so"e relationship to the parties or their transaction 8Scoles and <a#es, )onflict of &a' 311/312 I*.:-J9. There is no @uestion that the contracts sou%ht to be enforced b# clai"ants have a direct connection 'ith the $ahrain la' because the services 'ere rendered in that countr#. In .orse 7anagement Co* @P)EA v* .ational ,eamen 6oard, **2 S)R! 1:3 8*.:-9, the 45"plo#"ent !%ree"ent,4 bet'een Norse Mana%e"ent )o. and the late husband of the private respondent, eApressl# provided that in the event of illness or inCur# to the e"plo#ee arisin% out of and in the course of his e"plo#"ent and not due to his o'n "isconduct, 4co"pensation shall be paid to e"plo#ee in accordance 'ith and subCect to the li"itation of the ?or>"en6s )o"pensation !ct of the Republic of the Philippines or the ?or>er6s Insurance !ct of re%istr# of the vessel, 'hichever is %reater.4 Since the la's of Sin%apore, the place of re%istr# of the vessel in 'hich the late husband of private respondent served at the ti"e of his death, %ranted a better co"pensation pac>a%e, 'e applied said forei%n la' in preference to the ter"s of the contract. The case of 6agong +ilipinas Bverseas Corporation v* .ational 2abor Relations Commission, *0, S)R! -2: 8*.:,9, relied upon b# !I$) and $RII is inapposite to the facts of the cases at bench. The issue in that case 'as 'hether the a"ount of the death co"pensation of a Filipino sea"an should be deter"ined under the shipboard e"plo#"ent contract eAecuted in the Philippines or the <on%>on% la'. <oldin% that the shipboard e"plo#"ent

contract 'as controllin%, the court differentiated said case fro" Norse Mana%e"ent )o. in that in the latter case there 'as an eApress stipulation in the e"plo#"ent contract that the forei%n la' 'ould be applicable if it afforded %reater co"pensation. $. !I$) and $RII clai" that the# 'ere denied b# N&R) of their ri%ht to due process 'hen said ad"inistrative a%enc# %ranted Frida#/pa# differential, holida#/pa# differential, annual/leave differential and leave inde"nit# pa# to the clai"ants listed in !nneA $ of the Resolution. !t first, N&R) reversed the resolution of the PO5! !d"inistrator %rantin% these benefits on a findin% that the PO5! !d"inistrator failed to consider the evidence presented b# !I$) and $RII, that so"e findin%s of fact of the PO5! !d"inistrator 'ere not supported b# the evidence, and that so"e of the evidence 'ere not disclosed to !I$) and $RII 8Rollo, pp. 0,/03; *+3/*+29. $ut instead of re"andin% the case to the PO5! !d"inistrator for a ne' hearin%, 'hich "eans further dela# in the ter"ination of the case, N&R) decided to pass upon the validit# of the clai"s itself. It is this procedure that !I$) and $RII co"plain of as bein% irre%ular and a 4reversible error.4 The# pointed out that N&R) too> into consideration evidence sub"itted on appeal, the sa"e evidence 'hich N&R) found to have been 4unilaterall# sub"itted b# the clai"ants and not disclosed to the adverse parties4 8 Rollo, pp. 02/0.9. N&R) noted that so "an# pieces of evidentiar# "atters 'ere sub"itted to the PO5! ad"inistrator b# the clai"ants after the cases 'ere dee"ed sub"itted for resolution and 'hich 'ere ta>en co%niBance of b# the PO5! !d"inistrator in resolvin% the cases. ?hile !I$) and $RII had no opportunit# to refute said evidence of the clai"ants before the PO5! !d"inistrator, the# had all the opportunit# to rebut said evidence and to present their counter/evidence before N&R). !s a "atter of fact, !I$) and $RII the"selves 'ere able to present before N&R) additional evidence 'hich the# failed to present before the PO5! !d"inistrator. Dnder !rticle --* of the &abor )ode of the Philippines, N&R) is enCoined to 4use ever# and all reasonable "eans to ascertain the facts in each case speedil# and obCectivel# and 'ithout re%ard to technicalities of la' or procedure, all in the interest of due process.4 In decidin% to resolve the validit# of certain clai"s on the basis of the evidence of both parties sub"itted before the PO5! !d"inistrator and N&R), the latter considered that it 'as not eApedient to re"and the cases to the

PO5! !d"inistrator for that 'ould onl# prolon% the alread# protracted le%al controversies. 5ven the Supre"e )ourt has decided appealed cases on the "erits instead of re"andin% the" to the trial court for the reception of evidence, 'here the sa"e can be readil# deter"ined fro" the uncontroverted facts on record 8Develop"ent $an> of the Philippines v. Inter"ediate !ppellate )ourt, *.+ S)R! 3,0 I*..+J; Pa%donsalan v. National &abor Relations )o""ission, *-2 S)R! 130 I*.:1J9. ). !I$) and $RII char%e N&R) 'ith %rave abuse of discretion 'hen it ordered the PO5! !d"inistrator to hold ne' hearin%s for 3:0 clai"ants listed in !nneA D of the Resolution dated Septe"ber -, *..* 'hose clai"s had been denied b# the PO5! !d"inistrator 4for lac> of proof4 and for 3. clai"ants listed in !nneA 5 of the sa"e Resolution, 'hose clai"s had been found b# N&R) itself as not 4supported b# evidence4 8 Rollo, pp. 1*/1,9. N&R) based its rulin% on !rticle -*:8c9 of the &abor )ode of the Philippines, 'hich e"po'ers it 4ItoJ conduct investi%ation for the deter"ination of a @uestion, "atter or controvers#, 'ithin its Curisdiction, . . . .4 It is the posture of !I$) and $RII that N&R) has no authorit# under !rticle -*:8c9 to re"and a case involvin% clai"s 'hich had alread# been dis"issed because such provision conte"plates onl# situations 'here there is still a @uestion or controvers# to be resolved 8Rollo, pp. 1*/1-9. ! principle 'ell e"bedded in !d"inistrative &a' is that the technical rules of procedure and evidence do not appl# to the proceedin%s conducted b# ad"inistrative a%encies 8First !sian Transport E Shippin% !%enc#, Inc. v. Ople, *1- S)R! ,1- I*.:3J; !sia'orld Publishin% <ouse, Inc. v. Ople, *,S)R! -*. I*.:2J9. This principle is enshrined in !rticle --* of the &abor )ode of the Philippines and is no' the bedroc> of proceedin%s before N&R). Not'ithstandin% the non/applicabilit# of technical rules of procedure and evidence in ad"inistrative proceedin%s, there are cardinal rules 'hich "ust be observed b# the hearin% officers in order to co"pl# 'ith the due process re@uire"ents of the )onstitution. These cardinal rules are collated in Ang )ibay v* Court of 8ndustrial Relations , 3. Phil. 30, 8*.1+9. VIII The three petitions 'ere filed under Rule 3, of the Revised Rules of )ourt on the %rounds that N&R) had co""itted %rave abuse of discretion a"ountin%

to lac> of Curisdiction in issuin% the @uestioned orders. ?e find no such abuse of discretion. ?<5R5FOR5, all the three petitions are DISMISS5D. SO ORD5R5D. Padilla Cavide 9r* 6ellosillo and Dapunan 99* concur . !NN5O ! &IST OF )&!IM!NTS ?<O SI N5D HDIT)&!IMS $ienvenido )adalin !rdon 5llo !ntonio !cupan =osefino R. 5nano $enCa"in !leCandre Rolando 5. 5spiritu ?ilfredo !li%ada Patricio &. arcia =r. Robert $atica Felino M. =ocson 5nrico $elen 5duardo S. Koli"li" uiller"o )abeBa 5""anuel ). &abella Rodolfo )a%atan 5rnesto S. &isin% Francisco De uB"an 5dilberto . Ma%at I%nacio De Vera Victoriano &. Matilla 5rnesto De la )ruB Renato V. Morada Re#naldo DiBon Ildefonso ). MuPoB Ricardo 5brada <erbert . N% !ntonio 5Cercito Re#nado OcBon 5duardo 5spiritu Ro"eo Orial 5rnesto 5spiritu Ricardo Pa%uio Rodolfo 5spiritu 5"ilio Pa>in%an Oli%ario Francisco 5rnesto S. Pan%an !ntonio =ocson !lbert &. Huinto !leCandro Olorino Ro"ulo M. Re#es 5fren &irio &eonilo Tiposo Noel MartineB Manual P. Villanueva Francis Mediodia !rnaldo =. !lonBo &uciano MelendeB Pastor M. !@uino Re#"undo Mila# Ra"on )astro =ose Pancho raciano Isla Modesto Pin Pin Renato Matilla audencio Retana Ricardo $. Morada Rodelio Rieta, =r. Pacifico D. Navarro =ose RobleBa 5u%enio !. Re"on@uillo Ne"eriano San Mateo FeliA $arcena

=uanito Santos 5liseo FaCardo Pa@uito Solanto Ser%io S. Santia%o )onrado Solis, =r. !ntonio R. Rodri@ueB Menandro Te"prosa &uis Val $. Ron@uillo MaAi"iano Torres Teodorico ). Del Rosario Francisco Trias =oselito ). Solante Delfin Victoria Ricardo ). Da#rit ilbert Victoria !ntonio P. <ilario Do"in%o Villaher"osa 5d%ardo O. Salon%a Ro%elio Villanueva Dante ). !ceres =ose M. !ban Re#naldo S. !coCido !"orsolo S. !nadin% 5sidro M. !@uino !lfredo S. $alo%o Rosendo M. !@uino Ra"on T. $arboBa Rodolfo D. !revalo FeliA M. $obier ReA# De &eon !scuncion =ose <. )astillo $asilio $uenaventura 5""anuel <. )astillo !leAander $usta"ante Re"ar R. )astroCereB Vir%ilio V. $ution%, =r. Ro"eo O. )ecilio Delfin )aballero $a#ani M. Da#rit Danilo M. )astro FeliBardo S. Delos Santos Franscisco O. )orvera Nestor N. 5stava 5d%ardo N. Da#acap Rolando M. arcia Napoleon S. De &una !n%el D. uda $enCa"in 5. DoBa <enr# &. =acob Renato !. 5duarte Dante !. Matreo )l#de ). 5stu#e Renato S. Melo $uenaventura M. Francisco Resurrecion D. NaBareno Ro%elio D. uanio =ai"e ). Pollos !rnel &. =acob Do"in%o Pondales Renato S. &isin% 5u%enio Ra"ireB ?ilfredo S. &isin% &ucien M. Respall Ro%elio S. &opena !lvin ). Re#es $ernardito . &oreCa RiBalina R. Re#es I%nacio 5. MuPoB Huirino Ron@uillo Ro"eo ). Huintos !velino M. Ro@ue ?illafredo Da#rit Ra#"undo Pedro &. Sal%atar Vir%ilio &. Rosario Rodolfo T. Sultan =oselito Santia%o $enedicto 5. Torres 5rnesto . Sta. Maria Ser%io !. Drsolino avino D. TuaBon Ro%elio R. ValdeB 5lito S. Villanueva Dionisio $obon%o &a"berto H. !lcantara )risenciano Miranda !rturo P. !pilado Ildefonso ). Molina Turiano V. )oncepcion

or%onio ). Parala Do"in%o V. Dela )ruB Vir%ilio RicaBa 5duardo R. 5n%uancho Palconeri D. $anaa% Melanio R. 5steron $a#ani S. $raca"ante Santia%o N. aloso Onofre De Ra"a =oveniano <ilado =ose ). Melanes 5duardo <ipolito Ro"eo I. Pata% Ro"ero M. =avier Valerio !. 5van%elista Valentino S. =ocson ilbert 5. 5brada =ose $. &acson =uanito P. Villarino !r"ando M. Ma%sino !risteo M. $icol !velino O. Nu@ui Huiterio R. !%udo Del"ar F. Pineda Marianito =. !lcantara Federico T. Hui"an =ose !revalo !lberto M. RedaBa Ra"on !. !revalo Renosa Ron@uillo =esus $a#a Rodolfo Ron@uillo uiller"o $uenconseCo !ntonio T. Valdera"a Teresito !. )onstantino Ra"on Valdera"a 5duardo !. DiaB $eni%no N. MelendeB 5"i%dio !bar@ueB )laudio !. Modesto <erbert !#o Solo"on Re#es Mario $ataclan Isaias Talactac Ricardo OrdoneB ?illia" . Taruc $ernardino Robillos Oscar ). )alderon Francisco Villaflores Pacifico P. )a"pano !n%el Villarba 5ulalio . !r%uelles <onesto =ardiniano $en . $elir =uan M. Olindo )ornelio &. )astillo <ernani T. Victoriano Valeriano $. Francisco Dbed $. 5llo, Sr. =ai"e &. Relosa 5rnesto V. Macarai% !leA H. Villaher"osa 5spiritu !. MunoB, Sr. Vivencio V. !bello, =r. Rodri%o 5. Oca"po Renato ). )orcuera Rodolfo V. Ra"ireB 5"iliano $. Dela )ruB, =r. )eferino $atitis 5steban $. =ose, =r. !u%usto R. $ondoc Ricardo $. MartineB =ai"e ). )atli $ienvenido Ver%ara erardo $. &i"uaco, =r. Pedro . )a%atan Macario S. Ma%sino Francisco !polinario Do"in%o $. Solano Mi%uel !bestano Ricardo De Ra"a Prudencio !raullo !rturo V. !raullo

.*- F.-d *+., Vincente $. )<DIDI!N, Plaintiff/!ppellant, v. P<I&IPPIN5 N!TION!& $!NK, Defendant, and Raul DaBa, Defendant/!ppellee. Vincente $. )<DIDI!N, Plaintiff/!ppellee, and Philippine 5Aport and Forei%n &oan uarantee )orporation, Intervenor, v. P<I&IPPIN5 N!TION!& $!NK, Defendant, and Raul DaBa, Defendant/!ppellant. Nos. ::/3*13, ::/31:*. Dnited States )ourt of !ppeals, Ninth )ircuit. !r%ued Ma# ., *..+. Sub"itted Ma# *3, *..+. !u%. -., *..+. Steven ). Finle#, San Francisco, )al., for plaintiff/appellant/cross/appellee. $enCa"in eor%e ?illia"s, Santa Monica, )al., for defendant/appellee/cross/ appellant. !ppeal fro" the Dnited States District )ourt for the )entral District of )alifornia. $efore ?!&&!)5, T<OMPSON and O6S)!NN&!IN, )ircuit =ud%es. ?!&&!)5, )ircuit =ud%e7 * )huidian, a Philippine citiBen, sued DaBa, a Philippine citiBen and an official of the Philippine %overn"ent, after DaBa instructed the Philippine National $an> 8$an>9 to dishonor a letter of credit issued b# the Republic of the Philippines to )huidian. The district court dis"issed for lac> of subCect "atter Curisdiction, and )huidian ti"el# appeals. ?e have Curisdiction pursuant to -: D.S.). Sec. *-.*, and 'e affir".

Q )huidian o'ns interests in various businesses in )alifornia. In *.:,, the Philippine 5Aport and Forei%n &oan uarantee )orporation 8 uarantee )orporation9, an instru"entalit# of the Republic of the Philippines %overn"ent under then/President Ferdinand Marcos, sued several of )huidian6s co"panies in Santa )lara )ount# Superior )ourt. )huidian counterclai"ed. The parties settled the Santa )lara )ount# liti%ation in late *.:,. !s part of the settle"ent, the $an>, a state/o'ned ban>, issued an irrevocable letter of credit to )huidian on behalf of the uarantee )orporation, pa#able at the $an>6s &os !n%eles branch. 0 Shortl# thereafter, on Februar# -3, *.:3, the %overn"ent of President Marcos 'as overthro'n, and replaced b# the current %overn"ent of President )oraBon !@uino. The ne' re%i"e for"ed the Presidential )o""ission on ood overn"ent 8)o""ission9, an eAecutive a%enc# char%ed 'ith recoverin% 4ill/%otten 'ealth4 accu"ulated b# Marcos and his associates. Philippine 5Aecutive Order No. *, Sec. -8a9 8Feb. -:, *.:39. The )o""ission 'as %iven the authorit# 4ItJo enCoin or restrain an# actual or threatened co""ission of acts b# an# person or entit# that "a# render "oot and acade"ic, or frustrate, or other'ise "a>e ineffectual the efforts of the )o""ission....4 Id., Sec. 08d9. 1 DaBa 'as a dul# appointed "e"ber of the )o""ission. In March *.:3, actin% pursuant to section 08d9 of the eAecutive order, DaBa instructed the $an> not to "a>e pa#"ent on the letter of credit issued to )huidian. !ccordin% to DaBa, the )o""ission suspected that Marcos and )huidian had entered into a fraudulent settle"ent of the Santa )lara )ount# liti%ation to pa# off )huidian for not revealin% certain facts about Marcos6s involve"ent in )huidian6s business enterprises. !s a result, the )o""ission 'ished to eAa"ine the propriet# of the settle"ent, and, in order to secure pa#"ent in the event of a decision a%ainst )huidian, needed to prevent pa#"ent under the letter of credit. , ?hen the $an>, pursuant to DaBa6s order, refused to "a>e pa#"ent under the letter of credit, )huidian sued the $an> in &os !n%eles )ount# Superior )ourt. The $an> re"oved the action to federal district court pursuant to -: D.S.). Sec. *11*8d9. )huidian later added as defendants DaBa and several

other individuals, assertin% intentional interference in his contractual relations 'ith the $an>. 3 In an unrelated action, the uarantee )orporation sou%ht to reopen the Santa )lara )ount# liti%ation and set aside the settle"ent %ivin% rise to the letter of credit. &i>e DaBa, the uarantee )orporation asserted that the settle"ent 'as the product of a collusive arran%e"ent bet'een )huidian and Marcos. The uarantee )orporation also intervened in )huidian6s suit a%ainst DaBa, ar%uin% that )huidian should not recover because the settle"ent %ivin% rise to the letter of credit 'as invalid. 2 !fter protracted procedural "aneuverin%, DaBa "oved to dis"iss on %rounds of defective service of process and soverei%n i""unit#. DaBa also "oved for sanctions pursuant to rule **, Fed.R.)iv.P. The district court %ranted the "otion to dis"iss, holdin% that DaBa had soverei%n i""unit# for acts co""itted in his official capacit# as a "e"ber of the )o""ission, and that )huidian6s alle%ations that DaBa had acted be#ond his authorit# lac>ed "erit. The court denied DaBa6s re@uest for rule ** sanctions. )huidian appeals fro" the dis"issal, and DaBa cross/appeals fro" the denial of sanctions. II : The parties a%ree that absent a findin% of soverei%n i""unit#, the district court had subCect "atter Curisdiction to consider )huidian6s clai"s. Nevertheless, because the @uestion is one of first i"pression in this circuit and is sufficientl# in doubt, 'e deter"ined that it should be considered b# us sua sponte. . )huidian and DaBa are both citiBens of the Philippines. Therefore, no diversit# Curisdiction eAists. See -: D.S.). Sec. *00-. &i>e'ise, )huidian6s underl#in% clai"s do not present a federal @uestion. See -: D.S.). Sec. *00*. *+

Federal courts have Curisdiction over suits a%ainst forei%n soverei%ns under the Forei%n Soverei%n I""unit# !ct, -: D.S.). Secs. *3+-/*3** 8!ct9, even 'here the parties are not diverse and the underl#in% clai"s do not present a federal @uestion. Verlinden $.V. v. )entral $an> of Ni%eria, 13* D.S. 1:+, 1:./.1, *+0 S.)t. *.3-, *.3./21, 23 &.5d.-d :* 8*.:09 8Verlinden 9; -: D.S.). Sec. *00+8a9. Nevertheless, 'e do not base our Curisdiction on the !ct. To do so 'ould be insufficient for this case because so"e of the clai"s presented do not raise an issue of soverei%n i""unit#. For those 'hich do involve soverei%n acts, the district court did not rel# upon the !ct, and the parties dispute 'hether it applies. ?e need not resolve this @uestion since a "ore secure basis for Curisdiction eAists 'hich places the entire controvers# properl# before us 'ithout re%ard to the applicabilit# of -: D.S.). Sec. *00+8a9. ** The clai" a%ainst DaBa6s co/defendant, the $an>, is properl# in federal court pursuant to -: D.S.). Sec. *11*8d9. !t all relevant ti"es, the Philippine %overn"ent o'ned a "aCorit# interest in the $an>. Thus, the $an> @ualifies as an 4a%enc# or instru"entalit# of a forei%n state4 under -: D.S.). Sec. *3+08b9. See -: D.S.). Sec. *3+:8b98-9. Section *11*8d9 provides that in an# state court action a%ainst a forei%n state 8includin% an a%enc# or instru"entalit# of a forei%n state9, the forei%n state "a# re"ove the proceedin% to federal court. ?e have not previousl# considered 'hether re"oval pursuant to section *11*8d9 transfers the entire action or onl# the clai" a%ainst the re"ovin% entit#. ?e no' decide that Curisdictional issue. *The Fifth )ircuit faced an identical @uestion in !ran%o v. uB"an Travel !dvisors )orp., 3-* F.-d *02*, *02, 8,th )ir.*.:+9 8!ran%o 9. !ran%o stated a clai" a%ainst Do"inicana, an instru"entalit# of the %overn"ent of the Do"inican Republic, and several private parties. Do"inicana re"oved pursuant to section *11*8d9. The Fifth )ircuit held that 'here a soverei%n defendant in a "ulti/part# suit re"oves under section *11*8d9, 4the entire action a%ainst all defendants acco"panies it to federal court.4 Id. at *02,. The court relied upon t'o passa%es fro" the le%islative histor# of section *11*8b9. First, )on%ress spo>e of re"oval of 4the action4 rather than of 4the clai",4 su%%estin% that re"oval 'ould not effect a separation of the clai"s. Second, )on%ress ac>no'led%ed that co/defendants "i%ht be involuntaril# re"oved under section *11*8d9. 4Ne' subsection 8d9 of section *11* per"its the re"oval of an# such action at the discretion of the forei%n state, even if there are "ultiple defendants and so"e of these defendants desire not to re"ove the action.4 <.R.Rep. No. .1/*1:2, .1th )on%., -d Sess.,

reprinted in *.23 D.S.)ode )on%. E !d"in.Ne's 33+1, 330* 8e"phasis added9 8<ouse Report9. The Fifth )ircuit reasoned that such involuntar# re"oval could occur onl# if section *11*8d9 envisioned re"oval of the entire action. !ran%o, 3-* F.-d at *02,. *0 ?e a%ree 'ith the reasonin% of the Fifth )ircuit and hold that section *11*8d9 re@uires, in the case of a re"oval b# a forei%n soverei%n, that the federal court initiall# eAercise Curisdiction over clai"s a%ainst co/defendants even if such clai"s could not other'ise be heard in federal court. Thus, the proper re"oval b# DaBa6s co/defendant $an> also transferred the clai"s a%ainst DaBa to federal court, 'ithout re%ard to 'hether the !ct provides an independent basis for hearin% those clai"s. Therefore, %iven that the clai"s 'ere properl# in federal court, 'e neAt consider 'hether the !ct or so"e other for" of soverei%n i""unit# barred adCudication on the "erits. III *1 The central issue in this appeal is 'hether DaBa is entitled to soverei%n i""unit# for acts co""itted in his official capacit# as a "e"ber of the )o""ission. DaBa ar%ues that he @ualifies as an 4a%enc# or instru"entalit# of a forei%n state,4 -: D.S.). Sec. *3+08b9, and hence is entitled to i""unit# pursuant to the !ct, -: D.S.). Sec. *3+1. )huidian contends either that DaBa is not covered b# the !ct, or, in the alternative, that this case falls 'ithin the eAceptions to i""unit# eApressl# provided b# the !ct. See -: D.S.). Secs. *3+,/+2. The %overn"ent, in a 4State"ent of Interest of the Dnited States,4 ta>es a third position. Dnder the %overn"ent6s vie', DaBa is not covered b# the !ct because he is an individual rather than a corporation or an association, but he is nevertheless entitled to i""unit# under the %eneral principles of soverei%n i""unit# eApressed in the Restate"ent 8Second9 of Forei%n Relations &a' Sec. 338b9. !. *, ?e initiall# consider 'hether the !ct applies to an individual such as DaBa actin% in his official capacit# as an e"plo#ee of a forei%n soverei%n. Resolution of this issue necessitates a brief recitation of the evolution of the la' of soverei%n i""unit#.

*3 !t first, Dnited States courts, appl#in% federal co""on la', adhered to an absolute vie' of soverei%n i""unit# under 'hich a forei%n state enCo#ed i""unit# fro" all suits in federal court. See The Schooner 5Achan%e v. McFaddon, ** D.S. 82 )ranch9 **3, *03, 0 &.5d. -:2 8*:*-9. More recentl#, ho'ever, the prevailin% vie' in international la' shifted to the so/called 4restrictive4 for" of soverei%n i""unit#7 i""unit# 'ould attach onl# to inherentl# %overn"ental or 4public4 acts of a state. Non/%overn"ental or 4private4 activities, such as a state6s co""ercial enterprises, 'ould be subCect to suit in forei%n courts. In *.,-, in >eepin% 'ith prevailin% international practice, our State Depart"ent announced in the so/called Tate &etter that it 'ould henceforth advise Dnited States courts not to appl# soverei%n i""unit# to non/%overn"ental activities of forei%n states. See Tate, )han%ed Polic# )oncernin% the rantin% of Soverei%n I""unit# to Forei%n overn"ents, -3 Dep6t St.$ull. .:1/:, 8*.,-9, reprinted in !lfred Dunhill of &ondon, Inc. v. Republic of )uba, 1-, D.S. 3:-, 2**/*,, .3 S.)t. *:,1, *:3./2*, 1: &.5d.-d 0+* 8*.239; see %enerall# Verlinden, 13* D.S. at 1:2/::, *+0 S.)t. at *.3: 8recitin% historical bac>%round9; ?est v. Multibanco )o"er"eA, S.!., :+2 F.-d :-+, :-0/-1 8.th )ir.9 8sa"e9, cert. denied, 1:- D.S. .+3, *+2 S.)t. -1:0, .3 &.5d.-d 02, 8*.:29. *2 Subse@uent to the Tate letter, courts in the Dnited States for"all# adopted the restrictive vie' of soverei%n i""unit#. The principles of this approach 'ere collected in the Restate"ent 8Second9 of Forei%n Relations &a' Sec. 3, et se@. 8*.3,9. !ccordin% to the Restate"ent, i""unit# eAtended to7 *: 8a9 the state itself; *. 8b9 its head of state ...; -+ 8c9 its %overn"ent or an# %overn"ental a%enc#; -* 8d9 its head of %overn"ent ...;

-8e9 its forei%n "inister ...;8f9 an# other public "inister, official, or a%ent of the state 'ith respect to acts perfor"ed in his official capacit# if the effect of eAercisin% Curisdiction 'ould be to enforce a rule of la' a%ainst the stateI.J -0 Restate"ent 8Second9, Sec. 33. -1 In practice, ho'ever, the deter"ination of 'hether a suit 'as barred under the principles of the Restate"ent 'as "ade not b# the courts but b# the State Depart"ent. T#picall#, a forei%n state or instru"entalit# faced 'ith a suit in a court in our countr# 'ould appl# to the State Depart"ent for a findin% of i""unit#. The State Depart"ent 'ould "a>e a deter"ination, considerin% the co""on la' principles eApressed in the Restate"ent, and 'ould conve# the findin% to the relevant court b# filin% a 4su%%estion.4 In fact, ho'ever, the courts treated such 4su%%estions4 as bindin% deter"inations, and 'ould invo>e or den# i""unit# based upon the decision of the State Depart"ent. See 5A parte Republic of Peru, 0*: D.S. ,2:, ,:., 30 S.)t. 2.0, :++, :2 &.5d. *+*1 8*.109 85A parte Peru 9; Restate"ent 8Second9, Sec. 3. note *. -, Durin% the *.2+s, )on%ress beca"e concerned that the la' of soverei%n i""unit# under the practice of the Tate letter 'as leavin% i""unit# decisions subCect to diplo"atic pressures rather than to the rule of la'. In )on%ress6s vie', -3 The Tate letter ... has posed a nu"ber of difficulties. Fro" a le%al standpoint, if the Depart"ent applies the restrictive principle in a %iven case, it is in the a'>'ard position of a political institution tr#in% to appl# a le%al standard to liti%ation alread# before the courts.... -2 Fro" a forei%n relations standpoint, the initiative is left to the forei%n state.... Fro" the standpoint of the private liti%ant, considerable uncertaint# results. ! private part# 'ho deals 'ith a forei%n %overn"ent entit# cannot

be certain that his le%al dispute 'ith a forei%n soverei%n 'ill not be decided on the basis of nonle%al considerations throu%h the forei%n %overn"ent6s intercession 'ith the Depart"ent of State. -: <ouse Report at 33+2. -. !s a result, in *.23 )on%ress enacted the !ct, lar%el# codif#in% the eAistin% co""on la' of soverei%n i""unit#. The principal chan%e envisioned b# the statute 'as to re"ove the role of the State Depart"ent in deter"inin% i""unit#. Soverei%n i""unit# could be obtained onl# b# the provisions of the !ct, and onl# b# the courts interpretin% its provisions; 4su%%estions4 fro" the State Depart"ent 'ould no lon%er constitute bindin% deter"inations of i""unit#. See id. at 33+,/+3. 0+ The !ct is 4the sole basis for obtainin% IsubCect "atterJ Curisdiction over a forei%n state in our courts.4 !r%entine Republic v. !"erada <ess Shippin% )orp., 1:: D.S. 1-:, *+. S.)t. 3:0, 3::, *+- &.5d.-d :*: 8*.:.9 8!"erada <ess 9; &iu v. Republic of )hina, :.- F.-d *1*., *1-1 8.th )ir.*.:.9. Therefore, if DaBa is considered a 4forei%n state4 for purposes of the !ct, our decision on i""unit# "ust be based upon the provisions of that statute. The !ct, -: D.S.). Sec. *3+0, provides7 0* For purposes of this chapter// 08a9 ! 4forei%n state4 ... includes a political subdivision of a forei%n state or an a%enc# or instru"entalit# of a forei%n state as defined in subsection 8b9. 00 8b9 !n 4a%enc# or instru"entalit# of a forei%n state4 "eans an# entit#// 01 8*9 'hich is a separate le%al person, corporate or other'ise, and

0, 8-9 'hich is an or%an of a forei%n state or political subdivision thereof, or a "aCorit# of 'hose shares or other o'nership interest is o'ned b# a forei%n state or political subdivision thereof, and 03 809 'hich is neither a citiBen of a State of the Dnited States ... nor created under the la's of an# third countr#. 02 The %overn"ent and )huidian ar%ue that the definition of 4a%enc# or instru"entalit# of a forei%n state4 in section *3+08b9 includes onl# a%encies, "inistries, corporations, and other associations, and is not "eant to enco"pass individuals. Such a readin% dra's so"e si%nificant support fro" the le%islative histor# of section *3+08b9, 'hich reads in part7 0: The first criterion Isection *3+08b98*9 J ... is intended to include a corporation, association, foundation or an# other entit# 'hich, under the la' of the forei%n state 'here it 'as created, can sue or be sued in its o'n na"e.... 0. The second criterion Isection *3+08b98-9 J re@uires that the entit# be either an or%an of a forei%n state ... or that a "aCorit# of the entit#6s shares or other o'nership interest be o'ned b# a forei%n state.... 1+ !s a %eneral "atter, entities 'hich "eet the definition of an 4a%enc# or instru"entalit# of a forei%n state4 could assu"e a variet# of for"s, includin% a state tradin% corporation, a "inin% enterprise, a transport or%aniBation such as a shippin% line or airline, a steel co"pan#, a central ban>, an eAport association, a %overn"ental procure"ent a%enc# or a depart"ent or "inistr#.... 1* <ouse Report at 33*1.

1This lan%ua%e fro" the <ouse Report indicates that )on%ress 'as pri"aril# concerned 'ith or%aniBations actin% for the forei%n state, and "a# not have eApressl# conte"plated the case of individuals actin% as soverei%n instru"entalities. !t least one court has so concluded. Republic of the Philippines v. Marcos, 33, F.Supp. 2.0, 2.2 8N.D.)al.*.:29 8Marcos 9 84The ter"inolo%# of Isection *3+08b9 J//6a%enc#6, 6instru"entalit#6, 6entit#6, 6or%an6//"a>es it clear that the statute is not intended to appl# to natural persons.49. 10 )huidian and the Dnited States thus ar%ue that DaBa6s i""unit# cannot be evaluated under the provisions of the !ct. )huidian ar%ues that DaBa therefore cannot be %ranted i""unit#7 the !ct provides the sole source of soverei%n i""unit#, and DaBa does not @ualif# under its definition of a forei%n state. The %overn"ent, on the other hand, ur%es us to appl# the pre/ !ct co""on la' of i""unit#. In its vie', the !ct replaces co""on la' onl# in the conteAt of 4forei%n states4 as defined b# section *3+08b9; else'here// i.e., for entities covered b# the co""on la' but not covered b# the !ct// co""on la' principles re"ain valid. The %overn"ent further ar%ues that DaBa is i""une under the co""on la' principles of the Second Restate"ent; )huidian contends that even if the old co""on la' applies, an eAception to i""unit# is applicable. 11 ?e are persuaded b# neither of these ar%u"ents. ?hile section *3+08b9 "a# not eAplicitl# include individuals 'ithin its definition of forei%n instru"entalities, neither does it eApressl# eAclude the". The ter"s 4a%enc#,4 4instru"entalit#,4 4or%an,4 4entit#,4 and 4le%al person,4 'hile perhaps "ore readil# connotin% an or%aniBation or collective, do not in their t#pical le%al usa%e necessaril# eAclude individuals. No'here in the teAt or le%islative histor# does )on%ress state that individuals are not enco"passed 'ithin the section *3+08b9 definition; indeed, aside fro" so"e lan%ua%e 'hich is "ore co""onl# associated 'ith the collective, the le%islative histor# does not even hint of an intent to eAclude individual officials fro" the scope of the !ct. Such an o"ission is particularl# si%nificant in li%ht of nu"erous state"ents that )on%ress intended the !ct to codif# the eAistin% co""on la' principles of soverei%n i""unit#. !s pointed out above, pre/ *.23 co""on la' eApressl# eAtended i""unit# to individual officials actin% in their official capacit#. If in fact the !ct does not include such officials, the !ct contains a substantial unannounced departure fro" prior co""on la'.

1, The "ost that can be concluded fro" the precedin% discussion is that the !ct is a"bi%uous as to its eAtension to individual forei%n officials. Dnder such circu"stances, 'e decline to li"it its application as ur%ed b# )huidian and the %overn"ent. ?e conclude that the conse@uences of such a li"itation, 'hether the# be the loss of i""unit# ur%ed b# )huidian or the reversion to pre/!ct co""on la' as ur%ed b# the %overn"ent, 'ould be entirel# inconsistent 'ith the purposes of the !ct. 13 It is %enerall# reco%niBed that a suit a%ainst an individual actin% in his official capacit# is the practical e@uivalent of a suit a%ainst the soverei%n directl#. Monell v. Depart"ent of Social Services, 103 D.S. 3,:, 3.+ n. ,,, .: S.)t. -+*:, -+0, n. ,,, ,3 &.5d.-d 3** 8*.2:9 84IOJfficial/capacit# suits %enerall# represent onl# another 'a# of pleadin% an action a%ainst an entit# of 'hich an officer is an a%ent.49; Moron%o $and of Mission Indians v. )alifornia State $oard of 5@ualiBation, :,: F.-d *023, *0:- n. , 8.th )ir.*.::9 84! clai" alle%ed a%ainst a state officer actin% in his official capacit# is treated as a clai" a%ainst the state itself.49, cert. denied, 1:: D.S. *++3, *+. S.)t. 2:2, *+- &.5d.-d 22. 8*.:.9. Thus, to ta>e )huidian6s ar%u"ent first, 'e cannot infer that )on%ress, in passin% the !ct, intended to allo' unrestricted suits a%ainst individual forei%n officials actin% in their official capacities. Such a result 'ould a"ount to a blan>et abro%ation of forei%n soverei%n i""unit# b# allo'in% liti%ants to acco"plish indirectl# 'hat the !ct barred the" fro" doin% directl#. It 'ould be illo%ical to conclude that )on%ress 'ould have enacted such a s'eepin% alteration of eAistin% la' i"plicitl# and 'ithout co""ent. Moreover, such an interpretation 'ould defeat the purposes of the !ct7 the statute 'as intended as a co"prehensive codification of i""unit# and its eAceptions. The rule that forei%n states can be sued onl# pursuant to the specific provisions of sections *3+,/+2 'ould be vitiated if liti%ants could avoid i""unit# si"pl# b# recastin% the for" of their pleadin%s. 12 Si"ilarl#, 'e disa%ree 'ith the %overn"ent that the !ct can reasonabl# be interpreted to leave intact the pre/*.23 co""on la' 'ith respect to forei%n officials. !d"ittedl#, such a result 'ould not effect the s'eepin% chan%es 'hich 'ould acco"pan# the rule su%%ested b# )huidian7 the %overn"ent "erel# proposes that i""unit# of forei%n states be evaluated under the !ct and i""unit# of individuals be evaluated under the 8substantiall# si"ilar9 provisions of the Second Restate"ent. Nevertheless, such a rule 'ould also 'or> to under"ine the !ct.

1: The principal distinction bet'een pre/*.23 co""on la' practice and post/ *.23 statutor# practice is the role of the State Depart"ent. If individual i""unit# is to be deter"ined in accordance 'ith the Second Restate"ent, presu"abl# 'e 'ould once a%ain be re@uired to %ive conclusive 'ei%ht to the State Depart"ent6s deter"ination of 'hether an individual6s activities fall 'ithin the traditional eAceptions to soverei%n i""unit#. See 5A Parte Peru, 0*: D.S. at ,:., 30 S.)t. at :++; Restate"ent 8Second9 Sec. 3. note *. !s observed previousl#, there is little practical difference bet'een a suit a%ainst a state and a suit a%ainst an individual actin% in his official capacit#. !doptin% the rule ur%ed b# the %overn"ent 'ould pro"ote a peculiar variant of foru" shoppin%, especiall# 'hen the i""unit# @uestion is unclear. &iti%ants 'ho doubted the influence and diplo"atic abilit# of their soverei%n adversar# 'ould choose to proceed a%ainst the official, hopin% to secure State Depart"ent support, 'hile liti%ants less favorabl# positioned 'ould be inclined to proceed a%ainst the forei%n state directl#, confrontin% the !ct as interpreted b# the courts 'ithout the influence of the State Depart"ent. 1. !bsent an eAplicit direction fro" the statute, 'e conclude that such a bifurcated approach to soverei%n i""unit# 'as not intended b# the !ct. First, ever# indication sho's that )on%ress intended the !ct to be co"prehensive, and courts have consistentl# so interpreted its provisions. !"erada <ess, *+. S.)t. at 3:: 84ITJhe teAt and structure of the I!ctJ de"onstrate )on%ress6 intention that the I!ctJ be the sole basis for obtainin% Curisdiction over a forei%n state in our courts.49 8e"phasis added9. Met the rule ur%ed b# the %overn"ent 'ould in effect "a>e the statute optional7 b# artful pleadin%, liti%ants 'ould be able to ta>e advanta%e of the !ct6s provisions or, alternativel#, choose to proceed under the old co""on la'. ,+ Second, a bifurcated interpretation of the !ct 'ould be counter to )on%ress6s stated intent of re"ovin% the discretionar# role of the State Depart"ent. See <ouse Report at 33+,/+3. Dnder the %overn"ent6s interpretation, the pre/*.33 co""on la' 'ould appl#, in 'hich the State Depart"ent had a discretionar# role at the option of the liti%ant. $ut the !ct is clearl# intended as a "andator# rather than an optional procedure. To convert it to the latter b# allo'in% suits a%ainst individual officials to proceed under the old co""on la' 'ould substantiall# under"ine the force of the statute. There is

no sho'in% that )on%ress intended such a li"ited effect in passin% a supposedl# co"prehensive codification of forei%n soverei%n i""unit#. ,* Further"ore, no authorit# supports the continued validit# of the pre/*.23 co""on la' in li%ht of the !ct. Indeed, the !"erican &a' Institute recentl# issued the Restate"ent 8Third9 of Forei%n Relations &a', supersedin% the Second Restate"ent relied upon b# the %overn"ent in this action. The ne' restate"ent deletes in its entiret# the discussion of the Dnited States co""on la' of soverei%n i""unit#, and substitutes a section anal#Bin% such issues eAclusivel# under the !ct. Restate"ent 8Third9 of Forei%n Relations &a', Secs. 1,* et se@. 8*.:39. ,For these reasons, 'e conclude that )huidian6s suit a%ainst DaBa for acts co""itted in his official capacit# as a "e"ber of the )o""ission "ust be anal#Bed under the fra"e'or> of the !ct. ?e thus Coin the "aCorit# of courts 'hich have si"ilarl# concluded that section *3+08b9 can fairl# be read to include individuals sued in their official capacit#. Kline v. Kane>o, 3:, F.Supp. 0:3, 0:. 8S.D.N.M.*.::9 84The I!ctJ does appl# to individual defendants 'hen the# are sued in their official capacit#.49; !"erican $onded ?arehouse )o. v. )o"pa%nie Nationale !ir France, 3,0 F.Supp. :3*, :30 8N.D.Ill.*.:29 84Defendants Francois $achelet and =oe Miller, sued in their respective capacities as e"plo#ees of !ir France Ian instru"entalit# of the %overn"ent of FranceJ, are also protected b# the I!ctJ.49; Mueller v. Di%%el"an, No. :- )IV ,,*0 8S.D.N.M.*.:09 8&5OIS, %en/fed librar#, dist. file9 8Cud%es and cler>s of forei%n court, sued in their official capacities, entitled to i""unit# under the !ct9; Rios v. Marshall, ,0+ F.Supp. 0,*, 02*, 021 8S.D.N.M.*.:*9 8official of $ritish ?est Indies )entral &abour Or%aniBation, an instru"entalit# of the $ritish ?est Indies, protected under the !ct9; but see Marcos, 33, F.Supp. at 2.2 8!ct not applicable to Philippine solicitor %eneral9. $. ,0 The !ct states that a forei%n soverei%n is i""une fro" the Curisdiction of Dnited States courts eAcept in cases satisf#in% certain statutoril# defined eAceptions. -: D.S.). Secs. *00+8a9, *3+,/+2. )huidian ar%ues that three eAceptions are applicable here7 the 'aiver eAception, -: D.S.). Sec. *3+,8a98*9, the 4ta>in%s4 eAception, -: D.S.). Sec. *3+,8a9809, and the

torts eAception, -: D.S.). Sec. *3+,8a98,9. 8)huidian also ar%ued in the district court for the co""ercial activities eAception, -: D.S.). Sec. *3+,8a9 8-9; he does not press this ar%u"ent on appeal.9 ?e address each eAception in turn. *. ,1 Section *3+,8a98*9 provides that 4! forei%n state shall not be i""une fro" the Curisdiction of the )ourts of the Dnited States ... in an# case in 'hich the forei%n state has 'aived its i""unit# either eAplicitl# or b# i"plication....4 !ccordin% to )huidian, DaBa6s i""unit# 'as i"plicitl# 'aived because the $an> and the uarantee )orporation participated in this action, alle%edl# 'ithout raisin% the soverei%n i""unit# defense. Since the $an> and the uarantee )orporation are both instru"entalities of the Republic of the Philippines, )huidian ar%ues that their participation should 'aive the i""unit# of other Philippine instru"entalities, includin% DaBa. See =oseph v. Office of the )onsulate eneral of Ni%eria, :0+ F.-d *+*:, *+-- 8.th )ir.*.:29 8i"plicit 'aiver "a# be found 'here 4a forei%n state has filed a responsive pleadin% in a case 'ithout raisin% the defense of soverei%n i""unit#.49 8internal @uotation o"itted9, cert. denied, 1:, D.S. .+,, *+: S.)t. *+22, .. &.5d.-d -03 8*.::9. ,, ?e see no need to decide 'hether the $an> and the uarantee )orporation have in fact 'aived soverei%n i""unit#. It is uncontested that DaBa has no official ties 'ith either institution, aside fro" 'or>in% for the sa"e %overn"ent. The $an> and the uarantee )orporation are state/o'ned co""ercial enterprises, 'hile DaBa is e"plo#ed b# the )o""ission, an eAecutive a%enc# involved in political and financial "atters. )huidian ur%es us to hold that a 'aiver b# one forei%n instru"entalit# si"ultaneousl# 'aives i""unit# for all other instru"entalities of the sa"e state, even thou%h the instru"entalities are 'holl# unrelated. $ut to adopt such a cavalier disre%ard for the separate Curidical eAistence of forei%n instru"entalities is un'arranted and contrar# to eAistin% la' and polic#. ,3 In a sli%htl# different conteAt, the Supre"e )ourt has instructed us on the need to respect the separateness of forei%n instru"entalities. In First National )it# $an> v. $anco Para 5l )o"ercio 5Aterior de )uba 8$ancec9, 13- D.S. 3**, *+0 S.)t. -,.*, 22 &.5d.-d 13 8*.:09 8$ancec 9, $ancec

brou%ht suit on a letter of credit issued b# First National )it# $an> 8no' )itiban>9. )itiban> counterclai"ed, assertin% a ri%ht to set off the value of assets seiBed b# the )uban %overn"ent. $ancec asserted soverei%n i""unit#. The court ulti"atel# reCected this defense, but nonetheless cautioned a%ainst 4IfJreel# i%norin% the separate status of %overn"ent instru"entalities.4 4Due respect for the actions ta>en b# forei%n soverei%ns and for principles of co"it# bet'een nations leads us to conclude ... that %overn"ent instru"entalities established as Curidical entities distinct and independent fro" their soverei%n should nor"all# be treated as such.4 Id. at 3-3/-2, *+0 S.)t. at -,../-3++ 8citation o"itted9. The )ourt found support for its conclusion in the le%islative histor# of section *3*+8b9 of the !ct, 'hich %enerall# prohibits eAecution a%ainst the propert# of one instru"entalit# to satisf# a Cud%"ent a%ainst another. The le%islative histor# on section *3*+ states in part7 ,2 Section *3*+8b9 'ill not per"it eAecution a%ainst the propert# of one a%enc# or instru"entalit# to satisf# a Cud%"ent a%ainst another, unrelated a%enc# or instru"entalit#. There are co"pellin% reasons for this. If D.S. la' did not respect the separate Curidical identities of different a%encies or instru"entalities, it "i%ht encoura%e forei%n Curisdictions to disre%ard the Curidical divisions bet'een different D.S. corporations or bet'een a D.S. corporation and its independent subsidiar#. ,: <ouse Report at 33-:/-. 8citation o"itted9, @uoted in $ancec, 13- D.S. at 3-2/-:, *+0 S.)t. at -3++/+*. The )ourt concluded that, as a %eneral rule, the policies opposin% eAecution upon one instru"entalit# for Cud%"ents a%ainst another si"ilarl# "ilitated a%ainst allo'in% suits a%ainst one instru"entalit# for the 'ron%s of another. $ancec, 13- D.S. at 3-3/-:, *+0 S.)t. at -,../+*. ,. Thus, a person inCured b# the uarantee )orporation could not assert a clai" a%ainst DaBa, nor could the holder of a Cud%"ent a%ainst the uarantee )orporation eAecute upon propert# belon%in% to DaBa, even thou%h both are instru"entalities of the Republic of the Philippines. The policies identified in $ancec si"ilarl# lead us to conclude that an# 'aiver of i""unit# b# the uarantee )orporation or the $an> should not operate a%ainst DaBa. The Republic of the Philippines has established these instru"entalities as separate Curidical entities, and absent alle%ations of

fraudulent purposes, see id. at 3-., *+0 S.)t. at -3+*, 'e "ust treat the" as such. 3+ Practical considerations also support our decision. Different forei%n instru"entalities "a# have different abilities to clai" soverei%n i""unit#. In this case, for eAa"ple, one "a# easil# i"a%ine a situation in 'hich DaBa 'ould have i""unit# but the $an> or the uarantee )orporation 'ould not. The uarantee )orporation and the $an>, as co""ercial enterprises, "a# lac> i""unit# under the co""ercial activities eAception, -: D.S.). Sec. *3+,8a98-9. DaBa, on the other hand, as a purel# political actor clearl# 'ould not be denied i""unit# under the co""ercial eAception. Dnder )huidian6s vie' of the la', the $an> 'ould nevertheless be re@uired to assert a frivolous defense of soverei%n i""unit# to avoid 'aivin% DaBa6s i""unit#. $ecause there is no sho'in% that )on%ress intended such a result, 'e are satisfied that onl# DaBa 8or his soverei%n9, and not Curidicall# separate Philippine instru"entalities, can 'aive DaBa6s i""unit#. )huidian does not contend that an# action b# DaBa hi"self a"ounts to an i"plied 'aiver. Therefore, 'e hold that section *3+,8a98*9 is inapplicable. -. 3* )huidian neAt asserts that preventin% pa#"ent under his letter of credit a"ounted to a ta>in% of propert# in violation of the Dnited States )onstitution, and that i""unit# is therefore not appropriate. !s eAplained above, an# eAception to soverei%n i""unit# "ust arise fro" the provisions of the !ct. The !ct does contain a 4ta>in%s4 eAception7 section *3+,8a9809 states that i""unit# does not eAtend to cases 4in 'hich ri%hts in propert# ta>en in violation of international la' are in issue.4 85"phasis added.9 Thus, even if )huidian could de"onstrate a ta>in% under Dnited States la', section *3+,8a9809 'ould not appl# unless the ta>in% also violated international la'. 35Apropriation b# a soverei%n state of the propert# of its o'n nationals does not i"plicate settled principles of international la'. De SancheB v. $anco )entral de Nicara%ua, 22+ F.-d *0:,, *0.3/.: 8,th )ir.*.:,9 8De SancheB 9; Dre#fus v. Von Finc>, ,01 F.-d -1, 0+/0* 8-d )ir.9, cert. denied, 1-. D.S. :0,, .2 S.)t. *+-, ,+ &.5d.-d *+* 8*.239. )huidian is a citiBen of the Republic of the Philippines, the state 'hich, throu%h its a%ent DaBa, alle%edl# confiscated )huidian6s propert#. <ence, even if DaBa6s actions did

constitute a ta>in%, the# did not contravene international la'. Therefore, section *3+,8a9809 cannot provide an eAception to i""unit#. 0. 30 Finall#, )huidian asserts that the prevention of pa#"ent constituted a tort for 'hich i""unit# is denied under section *3+,8a98,9. That section provides an eAception to i""unit# for losses 4occurrin% in the Dnited States and caused b# the tortious act or o"ission of IaJ forei%n state or an# official or e"plo#ee of that forei%n state 'hile actin% 'ithin the scope of his office or e"plo#"ent.4 <o'ever, if DaBa6s action is properl# characteriBed as a ta>in% rather than a tort, it is not co%niBable under section *3+,8a98,9. 31 ?e have previousl# reCected liti%ants6 atte"pts to recharacteriBe ta>in%s clai"s as tort clai"s. In M#ers v. Dnited States, 0-0 F.-d ,:+ 8.th )ir.*.309, the %overn"ent alle%edl# da"a%ed plaintiffs6 propert# durin% the construction of a road. Plaintiffs brou%ht an action for trespass and 'aste under the Federal Tort )lai"s !ct 8FT)!9, 'hich per"its suits a%ainst the %overn"ent under circu"stances si"ilar to section *3+,8a98,9. ?e held that plaintiffs6 recharacteriBation of their ta>in%s clai" did not allo' the" to proceed under the FT)!. 3, It is clear to us that the clai"s of the appellants asserted a%ainst the Dnited States are to recover da"a%es for the ta>in% for public use of propert# clai"ed to be o'ned b# the appellants.... The repeated characteriBation b# the appellants of the ta>in% b# the Dnited States as one of trespass and the co""ission of 'aste ... does not convert the clai"s to cases soundin% in tort and thereb# confer Curisdiction on the District )ourt under the Federal Tort )lai"s !ct. The Fifth !"end"ent to the )onstitution prohibits the ta>in% of private propert# for public use 'ithout Cust co"pensation. To us the clai"s of appellants a%ainst the Dnited States are founded upon the )onstitution, and the acts of the Dnited States co"plained of are in the nature of inverse conde"nation. 33 Id. at ,:0.

32 The Fifth )ircuit applied M#ers in the international conteAt in De SancheB, 22+ F.-d at *0.:/.., a case factuall# si"ilar to the present one. De SancheB, an associate of for"er Nicara%uan president So"oBa, 'as the holder of a chec> issued to her b# a Nicara%uan state ban>. Follo'in% the overthro' of So"oBa, the ban>6s ne' directors stopped pa#"ent on the chec>. De SancheB sued the ban>, ar%uin% for eAceptions to i""unit# under sections *3+,8a9809 8ta>in%s9 and *3+,8a98,9 8tort9. !fter reCectin% the ta>in%s clai", the court declined to consider the alle%ations soundin% in tort. )itin% M#ers, the court held that De SancheB6s clai" 3: is not the t#pe of tort clai" that the Isection *3+,8a98,9 J eAception 'as intended to cover. Mrs. SancheB6s clai", althou%h soundin% in tort, is essentiall# a clai" for an unCust ta>in% of propert#. !s noted, )on%ress has provided an eAception in Section *3+,8a9809 for ta>in%s of propert# that violate international la'. ?e do not believe that )on%ress intended plaintiffs to be able to rephrase their ta>in%s clai"s in ter"s of conversion and thereb# brin% the clai"s even 'here the ta>in%s are per"itted b# international la'. 3. Id. at *0.:. 2+ ?e a%ree 'ith the reasonin% of the Fifth )ircuit. DaBa6s instruction to stop pa#"ent to )huidian, li>e the ban>6s refusal to honor De SancheB6s chec>, is in substance a ta>in% of propert#, not a tortious inCur# to propert#. !s such, it should be considered onl# under the ta>in%s eAception of section *3+,8a9 809. To hold other'ise 'ould be to allo' plaintiffs to escape the re@uire"ents of section *3+,8a9809 throu%h artful recharacteriBation of their ta>in%s clai"s. 1. 2* ?e conclude that none of the eAceptions to soverei%n i""unit# contained in the !ct appl# to the clai" a%ainst DaBa. Since DaBa "ust be %ranted i""unit# as an instru"entalit# of the Republic of the Philippines, 'e lac>

Curisdiction to entertain a suit for alle%ed "isdeeds co""itted 'hile actin% in his official capacit#. -: D.S.). Sec. *3+1. The district court properl# dis"issed these clai"s for lac> of subCect "atter Curisdiction. IV 2)huidian ar%ues in the alternative that DaBa did not co""it the acts co"plained of 'hile actin% in his official capacit#. !ccordin% to )huidian, DaBa acted out of "alice a%ainst )huidian, and also acted at the direction of arcia, an ene"# of )huidian6s to 'ho" DaBa o'ed personal favors. Thus, )huidian contends, 'e should treat DaBa6s obstruction of the pa#"ent as a private rather than a %overn"ental act. 20 Plainl# DaBa 'ould not be entitled to soverei%n i""unit# for acts not co""itted in his official capacit#. ?e have reco%niBed several circu"stances in 'hich a suit a%ainst a soverei%n6s e"plo#ee is distinct fro" a suit a%ainst the soverei%n. Obviousl#, 4IiJf the officer purports to act as an individual and not as an official, a suit directed a%ainst that action is not a suit a%ainst the soverei%n.4 &arson v. Do"estic and Forei%n )o""erce )orp., 002 D.S. 3:-, 3:., 3. S.)t. *1,2, *13*, .0 &.5d. *3-: 8*.1.9 8&arson 9. !s 'e stated in Dnited States v. Ma>i"a Tribal )ourt, :+3 F.-d :,0, :,. 8.th )ir.*.:39, cert. denied, 1:* D.S. *+3., *+2 S.)t. -13*, ., &.5d.-d :2+ 8*.:29, 4IiJf an e"plo#ee of the Dnited States acts co"pletel# outside his %overn"ental authorit#, he has no i""unit#. !n obvious eAa"ple 'ould be if a dispute occurs pertainin% to the sale of an e"plo#ee6s personal house, his %overn"ent e"plo#"ent provides hi" 'ith no shield to liabilit#.4 21 <ere, ho'ever, 'hile DaBa "a# or "a# not have acted 'ith an individual "otive, it is clear that in orderin% the pa#"ent not be "ade he purported to act as an official, not as an individual. Indeed, onl# his authorit# as a "e"ber of the )o""ission enabled hi" to prevent the pa#"ent. Thus, his actions, far fro" bein% 4co"pletel# outside his %overn"ental authorit#,4 id., 'ere entirel# dependent upon it. 2, Soverei%n i""unit# si"ilarl# 'ill not shield an official 'ho acts be#ond the scope of his authorit#. 4I?Jhere the officer6s po'ers are li"ited b# statute,

his actions be#ond those li"itations are considered individual and not soverei%n actions. The officer is not doin% the business 'hich the soverei%n has e"po'ered hi" to do....4 &arson, 002 D.S. at 3:., 3. S.)t. at *13*. 23 )huidian ar%ues that DaBa 'as not authoriBed to use his office for personal purposes, and hence his actions a%ainst )huidian are ultra vires and not subCect to i""unit#. $ut )huidian once "ore confuses the "otive 'ith the actions arisin% fro" the "otive. )huidian has not alle%ed an# respect in 'hich DaBa6s actions departed fro" his statutor# "andate. !s a "e"ber of the )o""ission, DaBa 'as entitled to investi%ate possible fraudulent transfers to Marcos associates. DaBa clearl# had the po'er to prevent the pa#"ent in aid of his investi%ation; indeed, he had the po'er to see> an inCunction if the $an> refused to co"pl#. See Philippine 5Aecutive Order *, Sec. 08d9. 22 )huidian does not ar%ue other'ise. Rather, he contends that DaBa6s personal "otive renders his actions ultra vires even thou%h the actions the"selves 'ere full# authoriBed. Dnder )huidian6s vie', ever# other'ise proper soverei%n action 'ould be subCect to Cudicial eAa"ination to ensure that the actin% officer did not derive so"e personal satisfaction fro" the co""ission of his official dut#. There is no authorit# to support such a radical eApansion of the eAceptions to soverei%n i""unit#. 2: The "ost )huidian can alle%e is that DaBa eAperienced a conver%ence bet'een his personal interest and his official dut# and authorit#. Such a circu"stance does not serve to "a>e his action an# less an action of his soverei%n. Therefore, 'e hold that the district court did not err in dis"issin% the clai"s a%ainst DaBa in his individual capacit#. V 2. DaBa ar%ues that the district court erred in declinin% to sanction )huidian for brin%in% this action. ?e 4appl# an abuse of discretion standard in revie'in% all aspects of a district court6s Rule ** deter"ination. ! district court 'ould necessaril# abuse its discretion if it based its rulin% on an erroneous vie' of the la' or on a clearl# erroneous assess"ent of the evidence.4 )ooter E ell

v. <art"arA )orp., /// D.S. ////, **+ S.)t. -112, -13+, **+ &.5d.-d 0,. 8*..+9. :+ DaBa raises t'o %rounds for i"posin% sanctions. First, he ar%ues that it 'as frivolous to "aintain that he 'as not i""une fro" suit. ?hile so"e of )huidian6s assertions 'ith re%ard to i""unit# 'ere ar%uabl# frivolous, others clearl# 'ere not. For eAa"ple, the @uestion of 'hether the $an> and the uarantee )orporation could 'aive DaBa6s i""unit# has not previousl# been addressed in a published opinion. !lthou%h 'e decide a%ainst )huidian on the 'aiver issue, his contentions could hardl# be labeled be#ond the bounds of reasonable le%al ar%u"ent. The presence of frivolous ar%u"ents or sub/ar%u"ents in an other'ise reasonable pleadin% 'ill not support rule ** sanctions. olden 5a%le Distributin% )o. v. $urrou%hs )orp., :+* F.-d *,0*, *,1+/1* 8.th )ir.*.:39. The district court properl# declined to a'ard sanctions on this %round. :* DaBa also alle%es a defective service of process, and ar%ues that as a result )huidian should be sanctioned for continuin% the suit in the face of an evident lac> of personal Curisdiction. DaBa did not ar%ue the lac> of personal Curisdiction on appeal, so 'e do not reach the "erits of this controvers#. <o'ever, our revie' of the relevant issues as disputed before the district court reveals substantial le%al and factual @uestions surroundin% the service of process clai". In our vie', )huidian6s contention that process 'as properl# served, 'hile possibl# lac>in% in "erit, is not fairl# characteriBed as frivolous. :?e conclude, therefore, that the district court did not abuse its discretion in den#in% DaBa6s "otion for rule ** sanctions. :0 !FFIRM5D. )) R Transfor"ed b# Public.Resource.Or%