TESDA, as an agency of the State, cannot be sued without its consent.

TESDA, as an agency of the State, cannot be sued without its consent.

The rule that a state may not be sued without its consent is embodied in Section 3, Article XVI of the 1987 Constitution and has been an established principle that antedates this Constitution.²⁷ It is as well a universally recognized principle of international law that exempts a state and its organs from the jurisdiction of another state.²⁸ The principle is based on the very essence of sovereignty, and on the practical ground that there can be no legal right as against the authority that makes the law on which the right depends.²⁹ It also rests on reasons of public policy — that public service would be hindered, and the public endangered, if the sovereign authority could be subjected to law suits at the instance of every citizen and, consequently, controlled in the uses and dispositions of the means required for the proper administration of the government.³⁰

 What are the various forms of state immunity from suit?

The proscribed suit that the state immunity principle covers takes on various forms, namely:

 a suit against the Republic by name;

 a suit against an unincorporated government agency; 

a suit against a government agency covered by a charter with respect to the agency’s performance of governmental functions;

 and a suit that on its face is against a government officer, but where the ultimate liability will fall on the government.

 In the present case, the writ of attachment was issued against a government agency covered by its own charter. As discussed above, TESDA performs governmental functions, and the issuance of certifications is a task within its function of developing and establishing a system of skills standardization, testing, and certification in the country. From the perspective of this function, the core reason for the existence of state immunity applies – i.e., the public policy reason that the performance of governmental function cannot be hindered or delayed by suits, nor can these suits control the use and disposition of the means for the performance of governmental functions. In Providence Washington Insurance Co. v. Republic of the Philippines,³¹ we said:

[A] continued adherence to the doctrine of non-suability is not to be deplored for as against the inconvenience that may be caused private parties, the loss of governmental efficiency and the obstacle to the performance of its multifarious functions are far greater if such a fundamental principle were abandoned and the availability of judicial remedy were not thus restricted. With the well known propensity on the part of our people to go to court, at the least provocation, the loss of time and energy required to defend against law suits, in the absence of such a basic principle that constitutes such an effective obstacle, could very well be imagined.

PROVI argues that TESDA can be sued because it has effectively waived its immunity when it entered into a contract with PROVI for a commercial purpose. According to PROVI, since the purpose of its contract with TESDA is to provide identification PVC cards with security seal which TESDA will thereafter sell to TESDA trainees, TESDA thereby engages in commercial transactions not incidental to its governmental functions.

TESDA’s response to this position is to point out that it is not engaged in business, and there is nothing in the records to show that its purchase of the PVC cards from PROVI is for a business purpose. While TESDA admits that it will charge the trainees with a fee for the PVC cards, it claims that this fee is only to recover their costs and is not intended for profit. 

SECOND DIVISION

G.R. No. 155504               June 26, 2009
PROFESSIONAL VIDEO, INC., Petitioner,
vs.
TECHNICAL EDUCATION AND SKILLS DEVELOPMENT AUTHORITY, Respondent.