Diplomatic and Consular Relations

DEPARTMENT OF FOREIGN AFFAIRS v. NLRCG.R. No. 113191, September 18, 1996

FACTSPrivate respondent, Jose C. Magyani, filed a case of illegal dismissal and the violation of

the labor-only contracting prohibition found in the labor code against the Asian Development Bank (ADB). The ADB claims that it is immune from suit as found in Article 50(1) and Article 55 of the Agreement Establishing the Asian Development Bank (or its Charter) stating that the ADB, as well as its President and Officers, were covered by an immunity from legal process except for borrowings, guaranties or the sale of securities and All Governors, Directors, alternates, officers and employees of the Bank, including experts performing missions for the Bank shall be immune from legal process with respect of acts performed by them in their official capacity, except when the Bank waives the immunity, respectively. The Labor Arbiter took cognizance of the case and stated that the entering of ADB into a contract is deemed as a waiver of its immunity. The NLRC then released and order to vacate the void judgment of the labor arbiter. The DFA then assailed the order of the NLRC and filed a petition for certiorari with to the Supreme Court.

ISSUEWhether or not the ADB is immune from suit.

HELDThe Charter forming the ADB clearly states that the organization itself and its Presidents

and Officers are immune from suit as stated by Article 50(1) and Article 55 thereof. One of the basic immunities of an international organization is immunity from local jurisdiction, i.e., that it is immune from the legal writs and processes issued by the tribunals of the country where it is found. The obvious reason for this is that the subjection of such an organization to the authority of the local courts would afford a convenient medium thru which the host government may interfere in their operations or even influence or control its policies and decisions of the organization; besides, such subjection to local jurisdiction would impair the capacity of such body to discharge its responsibilities impartially on behalf of its member-states. The service contracts referred to by private respondent have not been intended by the ADB for profit or gain but are official acts over which a waiver of immunity would not attach.