REPUBLIC OF INDONESIA VS VINZON

ISSUE:  Whether or not the Republic of Indonesia can invoke the doctrine of sovereign immunity from suit. 

FACTS:  Petitioner, Republic of Indonesia, represented by its Counsellor, Siti Partinah, entered into a Maintenance Agreement with respondent James Vinzon, sole proprietor of Vinzon Trade and Services. The equipment covered by the Maintenance Agreement are air conditioning units and was to take effect in a period of four years. When Indonesian Minister Counsellor Kasim assumed the position of Chief of Administration, he allegedly found respondent’s work and services unsatisfactory and not in compliance with the standards set in the Maintenance Agreement. Hence, the Indonesian Embassy terminated the agreement.  The respondent claims that the aforesaid termination was arbitrary and unlawful. Hence, he filed a complaint against the petitioners which opposed by invoking immunity from suit. 

DECISION:  Yes. The Republic of Indonesia can invoke the doctrine of sovereign immunity from suit. 

RATIO DECIDENDI:  The Republic of Indonesia is acting in pursuit of a sovereign activity when it entered into a contract with the respondent. The maintenance agreement was entered into by the Republic of Indonesia in the discharge of its governmental functions.