US Supreme Court allows RP courts to hear Arelma case
06/14/2008 | 02:14 AM
MANILA, Philippines - The United States Supreme Court has granted the government’s petition to allow the Philippine courts to settle the case involving the ownership of the $35 million account of the late dictator Ferdinand E. Marcos, Press Sec. Ignacio R. Bunye on Friday said.
"Solicitor General Agnes VST Devanadera announced that in a decision dated June 12, 2008, the United States Supreme Court granted the certiorari petition of the Republic in RP vs. Pimentel class et al. on grounds of sovereign immunity, comity, and dignity interests thereby dismissing the case filed by Merill Lynch, the holder of the $35million Marcos money," he said in an e-mail sent to reporters.
Voting 7-2, the US high court reversed a ruling by a US appeals court which stated that US courts can hear the case. This effectively allows Philippine courts to handle the case which involves part of the suspected ill-gotten wealth of Mr. Marcos.
The case emanated from the transfer of $2 million to Arelma S.A., a Panamanian corporation allegedly created in 1972 to cover up for the wealth amassed by Mr. Marcos. Arelma invested the money to Merrill Lynch, Pierce, Fenner & Smith, Inc., a New York-based brokerage house. The money had swelled to $35 million.
Documents recovered by the PCGG showed Mr. Marcos ordered the creation of Arelma Inc., where he transferred $2 million in funds from his alleged Swiss accounts. The company, in turn, invested the fund with Merrill Lynch in New York City. With accrued interests and account investment earnings, the fund has grown to about $35 million.
In 1986, the Swiss authorities, on a request by Manila, froze the accounts pending the determination of ownership. Because of the human rights victims’ claims however, Merrill Lynch filed an interpleader action — a remedy whereby a disinterested stakeholder in possession of property claimed by two or more persons may seek litigation without being involved in the issue — before the Hawaii District Court. But the government, represented by the Office of the Solicitor-General, blocked the move and claimed sovereign immunity from suit.
"The resolution of the interpleader action effectively would render meaningless its assertion of immunity by resolving ownership of assets in which it had an interest," Ms. Devanadera has said.
On May 4, 2006, however, the 9th Circuit of the US Court of Appeals that took over the case dismissed the government’s claim, and noted that sovereign immunity could not block an interpleader action.
Manila could not assert its right over the assets without a judgment from a local court, the US appellate court also noted. On March 5, 2007, the government filed a petition for a writ of certiorari to "vacate decision" of the appellate court. An official of the Solicitor General said this will now clear the way for the government to claim at the proper venue the alleged ill-gotten assets.
"We have long been telling them to file it at the probate court in Pasig," the official said. The US Supreme Court decision will also bolster the government’s legal fight in Singapore, where another interpleader relief was filed this time by WestLB.
Human rights victims of the Marcos regime, which number almost 10,000 said the $35 million should be awarded to them. In 2000, Merill Lynch sought intervention form the US courts but the government invoked sovereign immunity, which bars a legal proceeding against a government without its consent.
The government argued that the case on the Arelma account must be dismissed from the US courts and should be settled on Philippine courts
"The US Supreme Court held: comity and dignity interests take concrete form in this case. The claims of the Republic [of the Philippines] and PCGG (Presidential Commission on Good Government) arise from events of historical and political significance for the Republic and its people," Mr. Bunye quoted Ms. Devanadera as saying.
"The Republic and PCGG have a unique interest in resolving the ownership of or claims to the Arelma assets and in determining if, and how, the assets should be used to compensate those persons who suffered grievous injury under Marcos. There is a comity interest in allowing a foreign state to use its own courts for a dispute if it has a right to do so."
"This case will favorably affect all other litigation abroad. I am on my way to Switzerland for the other cases. The US Justice Department supported us. In fact the US Solicitor general also argued for us before the US Supreme Court," Ms. Devanadera said in an e-mail sent by Mr Bunye to reporters.
The Agrarian Reform Law states that the Comprehensive Agrarian Reform Program is the beneficiary of the Marcos ill-gotten wealth to be recovered by the PCGG. The PCGG is the agency tasked to recover the Marcoses’ ill-gotten wealth.
Meanwhile, the Presidential Commission on Good Government (PCGG) said the ruling is a "major victory" for the government.
"This victory is not just a victory of the PCGG but of the entire Filipino people as the recovery of the $35 million would be used as additional funding for anti-poverty programs of the government and economic development. This accomplishment would all the more serve to drive the commission to pursue vigorously the recovery of more ill-gotten assets and the resolution of cases both local and foreign", the PCGG said.
"The legal battle for the Arelma account in the US is already over. RP won," PCGG spokesman Nick Suarez said in a telephone interview with BusinessWorld.
"What it needs now is to pursue the resolution of civil case 141 in the local court. We will invoke this ruling for the release of the funds. At least, the recovery effort is under way with the favorable ruling." - BusinessWorld
"Solicitor General Agnes VST Devanadera announced that in a decision dated June 12, 2008, the United States Supreme Court granted the certiorari petition of the Republic in RP vs. Pimentel class et al. on grounds of sovereign immunity, comity, and dignity interests thereby dismissing the case filed by Merill Lynch, the holder of the $35million Marcos money," he said in an e-mail sent to reporters.
Voting 7-2, the US high court reversed a ruling by a US appeals court which stated that US courts can hear the case. This effectively allows Philippine courts to handle the case which involves part of the suspected ill-gotten wealth of Mr. Marcos.
The case emanated from the transfer of $2 million to Arelma S.A., a Panamanian corporation allegedly created in 1972 to cover up for the wealth amassed by Mr. Marcos. Arelma invested the money to Merrill Lynch, Pierce, Fenner & Smith, Inc., a New York-based brokerage house. The money had swelled to $35 million.
Documents recovered by the PCGG showed Mr. Marcos ordered the creation of Arelma Inc., where he transferred $2 million in funds from his alleged Swiss accounts. The company, in turn, invested the fund with Merrill Lynch in New York City. With accrued interests and account investment earnings, the fund has grown to about $35 million.
In 1986, the Swiss authorities, on a request by Manila, froze the accounts pending the determination of ownership. Because of the human rights victims’ claims however, Merrill Lynch filed an interpleader action — a remedy whereby a disinterested stakeholder in possession of property claimed by two or more persons may seek litigation without being involved in the issue — before the Hawaii District Court. But the government, represented by the Office of the Solicitor-General, blocked the move and claimed sovereign immunity from suit.
"The resolution of the interpleader action effectively would render meaningless its assertion of immunity by resolving ownership of assets in which it had an interest," Ms. Devanadera has said.
On May 4, 2006, however, the 9th Circuit of the US Court of Appeals that took over the case dismissed the government’s claim, and noted that sovereign immunity could not block an interpleader action.
Manila could not assert its right over the assets without a judgment from a local court, the US appellate court also noted. On March 5, 2007, the government filed a petition for a writ of certiorari to "vacate decision" of the appellate court. An official of the Solicitor General said this will now clear the way for the government to claim at the proper venue the alleged ill-gotten assets.
"We have long been telling them to file it at the probate court in Pasig," the official said. The US Supreme Court decision will also bolster the government’s legal fight in Singapore, where another interpleader relief was filed this time by WestLB.
Human rights victims of the Marcos regime, which number almost 10,000 said the $35 million should be awarded to them. In 2000, Merill Lynch sought intervention form the US courts but the government invoked sovereign immunity, which bars a legal proceeding against a government without its consent.
The government argued that the case on the Arelma account must be dismissed from the US courts and should be settled on Philippine courts
"The US Supreme Court held: comity and dignity interests take concrete form in this case. The claims of the Republic [of the Philippines] and PCGG (Presidential Commission on Good Government) arise from events of historical and political significance for the Republic and its people," Mr. Bunye quoted Ms. Devanadera as saying.
"The Republic and PCGG have a unique interest in resolving the ownership of or claims to the Arelma assets and in determining if, and how, the assets should be used to compensate those persons who suffered grievous injury under Marcos. There is a comity interest in allowing a foreign state to use its own courts for a dispute if it has a right to do so."
"This case will favorably affect all other litigation abroad. I am on my way to Switzerland for the other cases. The US Justice Department supported us. In fact the US Solicitor general also argued for us before the US Supreme Court," Ms. Devanadera said in an e-mail sent by Mr Bunye to reporters.
The Agrarian Reform Law states that the Comprehensive Agrarian Reform Program is the beneficiary of the Marcos ill-gotten wealth to be recovered by the PCGG. The PCGG is the agency tasked to recover the Marcoses’ ill-gotten wealth.
Meanwhile, the Presidential Commission on Good Government (PCGG) said the ruling is a "major victory" for the government.
"This victory is not just a victory of the PCGG but of the entire Filipino people as the recovery of the $35 million would be used as additional funding for anti-poverty programs of the government and economic development. This accomplishment would all the more serve to drive the commission to pursue vigorously the recovery of more ill-gotten assets and the resolution of cases both local and foreign", the PCGG said.
"The legal battle for the Arelma account in the US is already over. RP won," PCGG spokesman Nick Suarez said in a telephone interview with BusinessWorld.
"What it needs now is to pursue the resolution of civil case 141 in the local court. We will invoke this ruling for the release of the funds. At least, the recovery effort is under way with the favorable ruling." - BusinessWorld
