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Case Summary - G.R. No. 185572 - China National Machinery and Equipment Corp. vs. Santamaria

In the case G.R. No. 185572, the Supreme Court ruled against China National Machinery and Equipment Corp. (CNMEG), denying its claim for immunity from suit and determining that the Contract Agreement for the Northrail Project is not an executive agreement. The court found that CNMEG was engaged in proprietary activities and failed to prove its immunity under Chinese law. The case was remanded to the trial court for further proceedings regarding the validity of the contracts.

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25 views2 pages

Case Summary - G.R. No. 185572 - China National Machinery and Equipment Corp. vs. Santamaria

In the case G.R. No. 185572, the Supreme Court ruled against China National Machinery and Equipment Corp. (CNMEG), denying its claim for immunity from suit and determining that the Contract Agreement for the Northrail Project is not an executive agreement. The court found that CNMEG was engaged in proprietary activities and failed to prove its immunity under Chinese law. The case was remanded to the trial court for further proceedings regarding the validity of the contracts.

Uploaded by

Jach Salinas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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8/14/24, 11:33 PM Case Summary: G.R. No. 185572 - China National Machinery and Equipment Corp. vs.

Santamaria

Title
China National Machinery and Equipment Corp. vs. Santamaria

Case Decision Date


G.R. No. 185572 Feb 7, 2012

China National Machinery & Equipment Corp. (CNMEG) seeks immunity from suit and argues
that the Contract Agreement for the Northrail Project is an executive agreement, but the
Supreme Court rules against CNMEG, denying its immunity and determining that the Contract
Agreement is not an executive agreement, leading to further proceedings on the validity of the
contracts.

Case Summary (G.R. No. 185572)

Parties Involved and Background Information

China National Machinery & Equipment Corp. (CNMEG)

North Luzon Railways Corporation (Northrail)

Export Import Bank of China (EXIM Bank)

Department of Finance of the Philippines (DOF)

Philippine government

CNMEG entered into a Memorandum of Understanding with Northrail for a feasibility study on
a railway line from Manila to San Fernando, La Union.

EXIM Bank and DOF entered into a Memorandum of Understanding, wherein China agreed to
extend Preferential Buyer's Credit to the Philippine government to finance the Northrail
Project.

CNMEG was designated as the Prime Contractor for the project.

A Contract Agreement was executed between Northrail and CNMEG for the construction of
Section I, Phase I of the North Luzon Railway System.

The Philippine government and EXIM Bank also entered into a Loan Agreement for the
financing of the project.

Complaint and Motion to Dismiss


Respondents filed a complaint for annulment of contract and injunction, alleging that the
Contract Agreement and Loan Agreement were void.
CNMEG filed a motion to dismiss, arguing that it was immune from suit as an agent of the
Chinese government and that the project was a product of an executive agreement.

https://jur.ph/jurisprudence/summary/china-national-machinery-equipment-corp-v-santamaria#_ 1/2
8/14/24, 11:33 PM Case Summary: G.R. No. 185572 - China National Machinery and Equipment Corp. vs. Santamaria
Denial of Motion to Dismiss and Appeal
The trial court denied CNMEG's motion to dismiss.
The Court of Appeals affirmed the decision.

Petition for Review on Certiorari


CNMEG filed a petition for review on certiorari with the Supreme Court.
CNMEG argued that it was entitled to immunity from suit and that the Contract Agreement was
an executive agreement.

Supreme Court Ruling


The Supreme Court ruled that CNMEG was not entitled to immunity from suit as it was
engaged in a proprietary activity.
CNMEG failed to provide evidence that it was immune from suit under Chinese law.
The Court also held that the Contract Agreement was not an executive agreement as it was
governed by Philippine law.

Remand to Trial Court


The case was remanded to the trial court for further proceedings on the validity of the
contracts.

https://jur.ph/jurisprudence/summary/china-national-machinery-equipment-corp-v-santamaria#_ 2/2

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