SEAFDEC-AQD vs. NLRC

An international organization established by treaty among sovereign states enjoys immunity from the jurisdiction of local courts and administrative tribunals of the host country, such that the NLRC has no authority to hear and decide labor complaints filed against it.

SEAFDEC-AQD is a department of the Southeast Asian Fisheries Development Center (SEAFDEC), an intergovernmental organization organized through an agreement entered into in Bangkok, Thailand on December 28, 1967 by the governments of Malaysia, Singapore, Thailand, Vietnam, Indonesia, and the Philippines, with Japan as the sponsoring country. The Republic of the Philippines became a signatory to the Agreement establishing SEAFDEC on January 16, 1968. SEAFDEC-AQD was organized during the Sixth Council Meeting of SEAFDEC on July 3–7, 1973 in Kuala Lumpur, Malaysia, as one of the principal departments of SEAFDEC, to be established in Iloilo for the promotion of research in aquaculture. The Philippines, as a signatory, agreed to be represented by one Director in the governing SEAFDEC Council, and its national laws apply only insofar as its contribution to SEAFDEC is concerned. The Philippines expressly waived the application of Philippine laws on the disbursement of funds of SEAFDEC-AQD under Section 2 of Presidential Decree No. 292.

On April 20, 1975, private respondent Juvenal Lazaga was employed as a Research Associate on a probationary basis by SEAFDEC-AQD. He was later appointed Senior External Affairs Officer on January 5, 1983, with a monthly basic salary of P8,000.00 and a monthly allowance of P4,000.00. Thereafter, he was appointed to the position of Professional III and designated as Head of the External Affairs Office, with the same pay and benefits.

On May 8, 1986, petitioner Dr. Flor Lacanilao, in his capacity as Chief of SEAFDEC-AQD, sent a notice of termination to Lazaga, informing him that due to the financial constraints being experienced by the department, his services would be terminated at the close of office hours on May 15, 1986. The notice stated that Lazaga was entitled to separation benefits equivalent to one month of his basic salary for every year of service plus other benefits. Upon SEAFDEC-AQD's failure to pay Lazaga his separation pay, the latter filed on March 18, 1987 a complaint against petitioners for non-payment of separation benefits plus moral damages and attorney's fees with the Arbitration Branch of the NLRC.

Petitioners, in their answer with counterclaim, alleged that the NLRC had no jurisdiction over the case because SEAFDEC-AQD is an international organization, and that Lazaga must first secure clearances from the proper departments for property or money accountability before any claim for separation pay would be paid, which clearances had not yet been obtained. A formal hearing was conducted. Lazaga alleged that the non-issuance of the clearances was politically motivated and in bad faith. Petitioners, for their part, alleged that Lazaga had property accountability and an outstanding obligation to SEAFDEC-AQD in the amount of P27,532.11, and that he was not entitled to accrued sick leave benefits amounting to P44,000.00 due to his failure to avail of the same during his employment.

On January 12, 1988, the labor arbiter rendered a decision ordering petitioners to pay Lazaga P126,458.89 plus legal interest computed from May 16, 1986 until full payment, as separation pay and other post-employment benefits, and P50,000.00 as actual damages plus 10% attorney's fees. On July 26, 1988, the NLRC Fifth Division affirmed the labor arbiter's decision except as to the award of actual damages and attorney's fees, which it found baseless. Petitioners' motion for reconsideration was denied on January 9, 1989, prompting the present petition for certiorari.

• Immunity from Suit: Petitioners argued that the NLRC has no jurisdiction to hear and decide Lazaga's complaint because SEAFDEC-AQD is an international organization immune from suit owing to its international character, and the complaint is in effect a suit against the State which cannot be maintained without its consent.
• Property Accountability: Petitioners alleged that Lazaga has property accountability and an outstanding obligation to SEAFDEC-AQD in the amount of P27,532.11, and that he must first secure clearances from the proper departments for property or money accountability before any claim for separation pay will be paid.
• Sick Leave Benefits: Petitioners maintained that Lazaga is not entitled to accrued sick leave benefits amounting to P44,000.00 due to his failure to avail of the same during his employment with SEAFDEC-AQD.

• Estoppel on Jurisdiction: Respondent Lazaga invoked estoppel with respect to the issue of jurisdiction, arguing that petitioners had participated in the proceedings before the NLRC.
• Bad Faith in Non-Issuance of Clearances: Respondent Lazaga alleged that the non-issuance of the clearances by the petitioners was politically motivated and in bad faith.
• Prior Jurisprudence: Respondent NLRC cited the ruling of the Court in Lacanilao vs. De Leon to justify its assumption of jurisdiction over SEAFDEC.

• Immunity of International Organizations: Whether the NLRC has jurisdiction over SEAFDEC-AQD, an international organization, in a labor complaint filed by a former employee.
• Estoppel on Jurisdiction: Whether estoppel can confer jurisdiction upon a tribunal that otherwise has none over the subject matter of the action.

• Immunity of International Organizations: No. SEAFDEC-AQD, being a department of an intergovernmental organization, enjoys immunity from local jurisdiction, and the NLRC has no authority to hear and decide complaints against it.
• Estoppel on Jurisdiction: No. Estoppel does not apply to confer jurisdiction upon a tribunal that has none; jurisdiction is conferred by law and cannot be supplied by the agreement or conduct of the parties.

• Immunity of International Organizations: SEAFDEC was established by treaty among several sovereign states, including the Philippines, which became a signatory on January 16, 1968. SEAFDEC-AQD was organized as one of its principal departments. Being an intergovernmental organization, SEAFDEC and its departments enjoy functional independence and freedom from control of the state in whose territory its office is located. The Court relied on the doctrine that permanent international commissions and administrative bodies created by agreement of a considerable number of states for international purposes possess a distinct juridical personality independent of the municipal law of the host state and must be deemed to possess a species of international personality of their own. The Philippines, as a signatory, agreed that its national laws and regulations shall apply only insofar as its contribution to SEAFDEC is concerned, and expressly waived the application of Philippine laws on the disbursement of funds of SEAFDEC-AQD under Section 2 of P.D. No. 292. The then Minister of Justice, in Opinion No. 139, Series of 1984, likewise opined that Philippine courts have no jurisdiction over SEAFDEC-AQD, reasoning that subjection of such an organization to local authority would afford a convenient medium through which the host government may interfere in its operations and impair its capacity to discharge responsibilities impartially on behalf of its member-states. The NLRC's citation of Lacanilao vs. De Leon was misplaced, as that case involved a controversy between two claimants to the same position, not a controversy between SEAFDEC and an employee, and no plea for immunity was raised therein.

• Estoppel on Jurisdiction: Jurisdiction is conferred by law and may not be conferred by consent or agreement of the parties. Where there is none, no agreement of the parties can provide one. The lack of jurisdiction may be raised at any stage of the proceedings, even on appeal. A decision rendered by a tribunal not vested with appropriate jurisdiction is null and void. The Court cited Calimlim vs. Ramirez, which reaffirmed the time-honored principle that the issue of jurisdiction is not lost by waiver or by estoppel, and clarified that the exceptional circumstances in Sibonghanoy should not be applied as the general rule.

• Immunity of International Organizations from Local Jurisdiction — One of the basic immunities of an international organization is immunity from local jurisdiction, meaning it is immune from the legal writs and processes issued by the tribunals of the country where it is found. The rationale is that subjection of such an organization to local authority would afford a convenient medium through which the host government may interfere in its operations or influence its policies, and would impair its capacity to discharge responsibilities impartially on behalf of its member-states. The Court applied this doctrine to SEAFDEC-AQD, holding that the NLRC had no jurisdiction over the labor complaint filed against it.

• Jurisdiction Conferred by Law; Estoppel Unavailing — Jurisdiction over the subject matter is a matter of law and may not be conferred by consent or agreement of the parties. The lack of jurisdiction may be raised at any stage of the proceedings, even on appeal. Estoppel does not apply to confer jurisdiction upon a tribunal that has none. The Court applied this doctrine to reject Lazaga's invocation of estoppel, holding that the NLRC never had jurisdiction over the controversy.

• "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." — This passage, drawn from the then Minister of Justice's Opinion No. 139, Series of 1984, and adopted by the Court, articulates the controlling doctrine on the immunity of international organizations from local jurisdiction and the rationale therefor.

• "Respondent Lazaga's invocation of estoppel with respect to the issue of jurisdiction is unavailing because estoppel does not apply to confer jurisdiction to a tribunal that has none. Jurisdiction is conferred by law. Where there is none, no agreement of the parties can provide one." — This passage states the ratio decidendi on the jurisdiction-estoppel issue, reaffirming that jurisdiction is a matter of law and cannot be supplied by estoppel or party agreement.

• "Being an intergovernmental organization, SEAFDEC including its Departments (AQD), enjoys functional independence and freedom from control of the state in whose territory its office is located." — This passage defines the nature of SEAFDEC-AQD's status and the basis for its immunity, drawing on the principle that international organizations possess a distinct juridical personality independent of the municipal law of the host state.

• Calimlim vs. Ramirez, G.R. No. L-34362, 118 SCRA 399 (1982) — Followed. The Court relied on this case to reaffirm the principle that jurisdiction over the subject matter is a matter of law and may not be conferred by consent or agreement of the parties, and that the lack of jurisdiction may be raised at any stage of the proceedings. The Court also noted that the exceptional circumstances in Sibonghanoy should not be applied as a blanket doctrine overriding the non-waivability of objections to jurisdiction.

• Lacanilao vs. De Leon, 147 SCRA 286 (1987) — Distinguished. The NLRC cited this case to justify its assumption of jurisdiction over SEAFDEC. The Court held the citation was misplaced, explaining that the case involved a controversy between two claimants to the same position, not a controversy between SEAFDEC and an employee, and that no plea for immunity was raised therein.

• Article 1, Agreement Establishing the SEAFDEC — Defines the purpose of the Center as contributing to the promotion of fisheries development in Southeast Asia by mutual cooperation among member governments. The Court cited this provision to establish SEAFDEC's intergovernmental character.

• Paragraph 1, Article 6, Agreement Establishing the SEAFDEC — Provides that the Council shall be the supreme organ of the Center and all powers of the Center shall be vested in the Council. The Court cited this to underscore the functional independence of SEAFDEC from any single state.

• Article 5, Paragraph 1, Agreement Establishing the SEAFDEC — Provides that each member government shall be represented by one Director in the governing SEAFDEC Council. The Court cited this to show the Philippines' participation as a signatory.

• Article 11, Agreement Establishing the SEAFDEC — Provides that national laws and regulations of member states shall apply only insofar as their contributions to SEAFDEC are concerned. The Court cited this to show that Philippine laws do not generally govern SEAFDEC's internal operations.

• Section 2, Presidential Decree No. 292 — The Philippines expressly waived the application of Philippine laws on the disbursement of funds of SEAFDEC-AQD. The Court cited this to reinforce that the NLRC, a creature of Philippine law, has no jurisdiction over SEAFDEC-AQD's employment dispositions.

Melencio-Herrera, Paras, Padilla, and Regalado, JJ., concurred.