MANILA, Philippines — Supreme Court Senior Associate Justice Antonio Carpio on Monday reiterated that the “wholesale waiver of sovereign immunity” stipulated in the loan agreements that the Duterte administration recently entered into with China was “unheard of.”
Carpio, who has led the fight for the country’s sovereign rights in waters within the Philippines’ 370-kilometer exclusive economic zone in the South China Sea, said the surrender of a state’s sovereign immunity had dangerous aspects.
He disputed the claims of Malacañang and the Department of Finance that such arrangement was “normal” in foreign borrowings between nations.
Private entities
He earlier warned that China may access the gas-rich Recto (Reed) Bank in the West Philippine Sea if the Philippines failed to pay its $62-million loan for the Chico River Pump Irrigation Project.
“[The] waiver of sovereign immunity from suit is common when a state borrows or transacts with private entities, but not in official development assistance (ODA) loans between states or with multilateral lenders like World Bank,” Carpio told the Inquirer.
“Even in loan agreements between states and private lenders, such wholesale waiver of sovereign immunity is unheard of,” he said.
According to Carpio, official documents covering the nine ODA loan agreements that the finance department posted on its website showed that two Chinese-funded projects—the Chico River and Kaliwa Dam—contained “waiver of sovereign immunity” as a requirement.
No such condition
Five other similar funding assistance from Japan, South Korea and the World Bank did not demand such a condition, he said.
“In the Chico River loan agreement, the Philippines waived all the foregoing aspects of sovereign immunity,” he said.
Carpio said a waiver of sovereign immunity may involve lawsuits, “with the related aspect of submission to the jurisdiction of a foreign arbitral tribunal which may be controlled by the other party.”
The principle could also involve “state assets” and the waiver of sovereign immunity from “execution, with the related aspect of automatic recognition of the foreign judgment or arbitral award.”