Republic of the Philippines v Maler Foundation: Sovereign Immunity & Interpleader Proceedings

The Republic of the Philippines appealed the dismissal of its application to stay interpleader proceedings concerning funds held in an escrow account in Singapore. The Court of Appeal dismissed the appeal, holding that the Republic had submitted to the jurisdiction of the court and that sovereign immunity should not be extended to cases involving debts or choses in action in the possession or control of a third party.

1. Case Overview

1.1 Court

Court of Appeal

1.2 Outcome

Appeal Dismissed

1.3 Case Type

Civil

1.4 Judgment Type

Grounds of Decision

1.5 Jurisdiction

Singapore

1.6 Description

Philippine govt. sought to stay interpleader proceedings based on sovereign immunity. Court dismissed stay, finding submission to jurisdiction.

1.7 Decision Date

23 March 2008

2. Parties and Outcomes

Party Name	Role	Type	Outcome	Outcome Type	Counsels
Republic of the Philippines	Appellant	Government Agency	Appeal Dismissed	Lost	Michael Palmer of Harry Elias Partnership Andy Lem of Harry Elias Partnership Sharmini Sharon Selvaratnam of Harry Elias Partnership Harry Elias of Harry Elias Partnership Surenthiraj s/o Sauntharajah of Harry Elias Partnership
Maler Foundation	Respondent	Corporation	Appeal Dismissed	Won	Chandra Mohan Rethnam of Rajah & Tann Jerome Robert of Rajah & Tann Ng Jin of Rajah & Tann
Avertina Foundation	Respondent	Corporation	Appeal Dismissed	Won	Chandra Mohan Rethnam of Rajah & Tann Jerome Robert of Rajah & Tann Ng Jin of Rajah & Tann
Palmy Foundation	Respondent	Corporation	Appeal Dismissed	Won	Chandra Mohan Rethnam of Rajah & Tann Jerome Robert of Rajah & Tann Ng Jin of Rajah & Tann
Vibur Foundation	Respondent	Corporation	Appeal Dismissed	Won	Chandra Mohan Rethnam of Rajah & Tann Jerome Robert of Rajah & Tann Ng Jin of Rajah & Tann
Aguamina Corporation	Respondent	Corporation	Appeal Dismissed	Won	Chandra Mohan Rethnam of Rajah & Tann Jerome Robert of Rajah & Tann Ng Jin of Rajah & Tann
Plaintiffs in the estate of Ferdinand and E Marcos Human Rights Litigation in Case No. MDL840-R in the United States District of Hawaii	Respondent	Association	Appeal Dismissed	Won	Cham Shan Jie Mark of Kenneth Tan Partnership Soh Wei Chi of Kenneth Tan Partnership Kenneth Michael Tan Wee Kheng of Kenneth Tan Partnership

3. Judges

Judge Name	Title	Delivered Judgment
Chan Sek Keong	Chief Justice	Yes
Andrew Phang Boon Leong	Justice of the Court of Appeal	No

4. Counsels

Counsel Name	Organization
Michael Palmer	Harry Elias Partnership
Andy Lem	Harry Elias Partnership
Sharmini Sharon Selvaratnam	Harry Elias Partnership
Harry Elias	Harry Elias Partnership
Surenthiraj s/o Sauntharajah	Harry Elias Partnership
Chandra Mohan Rethnam	Rajah & Tann
Jerome Robert	Rajah & Tann
Ng Jin	Rajah & Tann
Cham Shan Jie Mark	Kenneth Tan Partnership
Soh Wei Chi	Kenneth Tan Partnership
Kenneth Michael Tan Wee Kheng	Kenneth Tan Partnership

4. Facts

Funds were held in escrow in PNB’s account with WestLB AG, Singapore.
Supreme Court of the Philippines ordered the Funds be forfeited to the Appellant.
Other claimants notified WLB of their claims to the Funds.
WLB took out the Interpleader Summons to interplead the conflicting claims.
Funds were originally part of a larger pool of assets held in Swiss bank accounts.
PCGG sought assistance of Swiss authorities to recover the Marcos assets.
Swiss Federal Council issued an interim order freezing the Marcos assets.

5. Formal Citations

Republic of the Philippines v Maler Foundation and Others, CA 7/2007, [2008] SGCA 14

6. Timeline

Date	Event
1986-02-28	Presidential Commission on Good Government set up
1986-03-24	Swiss Federal Council issued interim order freezing Marcos assets
1986-04-07	Formal request from the Appellant for assistance under the IMAC
1986-04-01	Investigating magistrates in the Swiss cantons of Zurich, Fribourg and Geneva issued freezing orders against the Marcos assets
1990-01-01	Investigating magistrates in the Swiss cantons of Zurich, Fribourg and Geneva issued freezing orders against the Marcos assets
1990-12-21	Swiss Federal Court affirmed the freezing orders of the Fribourg and the Zurich cantonal courts
1991-12-17	Appellant petitioned the Sandiganbayan for the forfeiture of the Marcos assets
1993-10-18	FP Defendants filed their answers to the claim
1995-02-03	HR Claimants obtained damages from the Hawaiian district court
1995-08-14	PCGG and PNB entered into an escrow agreement
1996-10-18	Appellant applied for summary judgment
1997-12-10	Swiss Federal Supreme Court affirmed the order of the District Attorney of Zurich
1998-04-01	Swiss authorities released the Marcos assets to PNB
1998-07-01	Swiss authorities released the Marcos assets to PNB
2000-03-10	Another application for summary judgment was filed
2000-09-19	Sandiganbayan declared that the Marcos assets were ill-gotten wealth
2002-01-31	Marcos assets amounted to more than US$658m with accrued interest
2002-01-31	Sandiganbayan reversed its decision
2003-07-15	Supreme Court of the Philippines reversed the decision of the Sandiganbayan and ordered the Marcos assets to be forfeited to the Appellant
2003-08-25	Bulk of assets deposited with WLB, amounting to about US$75m, were released to the Appellant
2003-09-10	PNB gave notice of termination of the remaining deposit accounts
2003-09-10	HR Claimants notified WLB of their claim against the Funds
2003-09-11	PNB was unable to obtain the release of the remaining sum from WLB
2003-11-18	Decision affirmed by the Full Bench of the Supreme Court
2004-01-22	Sandiganbayan issued a writ of execution for the transfer to the Appellant of those of the Marcos assets held by PNB and deposited with WLB
2004-01-27	PCGG passed resolution no 2004-Y-001
2004-01-29	PCGG passed resolution no 2004-Y-002
2004-01-30	Filing of the Interpleader Summons
2004-03-24	Court granted WLB’s application in the Interpleader Summons
2005-08-18	PNB filed Summons in Chambers No 4231 of 2005
2005-10-21	Hearing of SIC 4231/05
2005-11-07	PNB filed Summons in Chambers No 5673 of 2005
2006-02-08	PNB filed Summons No 552 of 2006
2006-02-22	Court granted the order on 22 February 2006
2006-02-28	HR Claimants filed Summons No 871 of 2006
2006-03-08	Appellant filed Summons No 1048 of 2006
2006-05-11	Application was granted on 11 May 2006, and the Appellant was joined as the tenth defendant
2006-08-22	Appellant filed the Stay Application
2008-03-24	Judgment reserved

7. Legal Issues

Sovereign Immunity
- Outcome: The court held that the Appellant had submitted to the jurisdiction of the court and that sovereign immunity should not be extended to cases involving debts or choses in action in the possession or control of a third party.
- Category: Substantive
- Sub-Issues:
  - Application of State Immunity Act
  - Submission to jurisdiction
  - Agency
  - Step in proceedings
Interpleader Proceedings
- Outcome: The court considered the interpleader proceedings in the context of the sovereign immunity claim.
- Category: Procedural

8. Remedies Sought

Stay of Proceedings
Release of Funds

9. Cause of Actions

Interpleader
Claim for Funds

10. Practice Areas

Commercial Litigation
International Law

11. Industries

Banking
Legal

12. Cited Cases

Case Name	Court	Affirmed	Citation	Jurisdiction	Significance
WestLB AG v Philippine National Bank	Singapore High Court	Yes	[2007] 1 SLR 967	Singapore	Cited as the judgment under appeal.
Sultan of Johore v Abubakar Tunku Aris Bendahar	Privy Council	Yes	[1952] AC 318	United Kingdom	Cited for the principle that a sovereign can submit to the jurisdiction of a court.
The Schooner Exchange v McFaddon	United States Supreme Court	Yes	11 US 116 (1812)	United States	Cited for the foundation of state immunity based on equality and independence of states.
Juan Ysmael & Company Incorporated v Government of the Republic of Indonesia	Privy Council	Yes	[1955] AC 72	United Kingdom	Cited for the test on the degree of proof required for a state to assert immunity.
Compania Naviera Vascongado v Steamship Cristina	House of Lords	Yes	[1938] AC 485	United Kingdom	Cited for the principle that courts will not implead a foreign sovereign or seize property in their possession.
United States of America and Republic of France v Dollfus Mieg et Cie SA and Bank of England	House of Lords	Yes	[1952] AC 582	United Kingdom	Cited for the application of sovereign immunity to property in the possession of a bailee.
Rahimtoola v Nizam of Hyderabad	House of Lords	Yes	[1958] AC 379	United Kingdom	Cited for the application of sovereign immunity when money was paid to an agent of a foreign state.
Trendtex Trading Corporation v Central Bank of Nigeria	English Court of Appeal	Yes	[1977] QB 529	United Kingdom	Cited for the principle that commercial acts of a foreign state are not immune from jurisdiction.
Haile Selassie v Cable and Wireless, Limited	English Court of Appeal	Yes	[1938] Ch 839	United Kingdom	Cited for the principle that sovereign immunity does not extend to cases where proceedings do not involve bringing the foreign sovereign before the Court.
The Jupiter	Not Available	Yes	[1924] P 236	Not Available	Cited as a case where a bare assertion by a sovereign state of its title to or interest in disputed property was sufficient to invoke state immunity.
Williams & Glyn’s Bank Plc v Astro Dinamico Compania Naviera SA	Not Available	Yes	[1984] 1 WLR 438	Not Available	Cited for the distinction between two types of jurisdiction in stay applications.
Kuwait Airways Corporation v Iraqi Airways Company and Republic of Iraq	Not Available	Yes	[1995] 1 Lloyd’s Rep 25	Not Available	Cited for the principles on what amounts to a step in the proceedings for the purposes of the SIA.
Eagle Star Insurance Co Ltd v Yuval Insurance Co Ltd	Not Available	Yes	[1978] 1 Lloyd’s Rep 357	Not Available	Cited for the formulation of a “step in the proceedings”.
The Charkieh	Not Available	Yes	(1873) LR 4 A & E 59	Not Available	Cited for the principle that inter-governmental transactions are best solved through inter-governmental negotiations in accordance with international law.
Chong Long Hak Kee Construction Trading Co v IEC Global Pte Ltd	Not Available	Yes	[2003] 4 SLR 499	Not Available	Cited for the test that a step in the proceedings must reflect an “unequivocal, clear and consistent” intention to submit to the jurisdiction of the court.
Australian Timber Products Pte Ltd v Koh Brothers Building & Civil Engineering Contractor (Pte) Ltd	Not Available	Yes	[2005] SLR 168	Not Available	Cited in rebuttal submissions for the Stay Application.
Stevenson v. Anderson	Not Available	Yes	(1814) 2 V & B 407	Not Available	Cited as a case of interpleader.
Larivière v. Morgan	Not Available	Yes	(1871–72) LR 7 Ch App 550	Not Available	Cited as a case of interpleader.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute Name	Jurisdiction
State Immunity Act (Cap 313, 1985 Rev Ed)	Singapore
State Immunity Act (Cap 313, 1985 Rev Ed)	Singapore

15. Key Terms and Keywords

15.1 Key Terms

Sovereign Immunity
Interpleader
Escrow
Forfeiture Order
State Immunity Act
Step in Proceedings
Agency
PCGG
Marcos Assets

15.2 Keywords

Sovereign Immunity
Interpleader Proceedings
State Immunity Act
Republic of the Philippines
Marcos Assets
Singapore Court of Appeal

17. Areas of Law

Area Name	Relevance Score
International Law	90
Arbitration	10
Civil Procedure	10

16. Subjects

International Law
Civil Procedure
Sovereign Immunity