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http://newsinfo.inquirer.net/inquirerheadlines/nation/view/20091211-241328/PNB-to-appeal-new-US-trial-in-Arelma-case

PNB to appeal new US trial in Arelma case

By Philip Tubeza
Philippine Daily Inquirer

Posted date: December 11, 2009

MANILA, Philippines — The Philippine National Bank (PNB) IS set to appeal a US court ruling ordering a new trial to determine ownership of $35 million in ill-gotten Marcos wealth deposited with Merrill Lynch, according to a Presidential Commission on Good Government official.

PCGG Commissioner Jaime Bautista said the PNB will appeal the decision of New York State Supreme Court Justice Charles Ramos to hear the claim of Marcos human rights victims to the Arelma account in Merrill Lynch, while the PCGG studies whether or not to get formally involved in the case.

“The PNB will file a motion to appeal his (Ramos’) decision while the republic studies its legal options. We have many options here,” said Bautista in an interview.

Pre-trial

Ramos set the pre-trial conference of the case for Dec. 15 but Bautista said that the PNB—which was named a respondent in the case together with Merrill Lynch and the Arelma Foundation—had until Dec. 17 to file an appeal.

PCGG Commissioner Ricardo Abcede said the agency was still consulting with its American lawyers on whether or not the Philippine government—through the PCGG—should get involved in the case.

“We are still studying this because our lawyers advised us that if we attend (the New York hearing), we would be legally entrapped,” said Abcede in an interview.

“If we attend the hearing, we would be submitting to the jurisdiction of that court and casting away our sovereign immunity,” he explained.

Sovereign immunity

Sovereign immunity refers to the legal doctrine that bars legal proceedings against a government without its consent.

The Philippine government in 2008 successfully used this doctrine to convince the US Supreme Court to reverse a lower court decision awarding the $35 million to the human rights victims of the dictator Ferdinand Marcos.

The US high court ruled that when a country asserts a claim to property in the US, and that claim is not frivolous, the dismissal of civil cases involving that property is appropriate when the country decides to assert its sovereign immunity and refuses to join in the proceedings.

But last month Ramos ruled that the claim of the 10,000 human rights victims to the Arelma account should again be heard in court. He said the US high court ruling was issued in a different context and, while it was “informative,” the decision was “not binding on New York courts.”

“Should (the Philippine government) continue to elect not to participate, all other parties to this proceeding should not be forced to forego a resolution as to the disposition of this property… Despite the Republic’s absence, an effective judgment may be rendered,” he said.

The $35-million Arelma account grew from $2 million that was first deposited with Merrill, Lynch, Pierce, Fenner & Smith Inc. in New York in 1972.

Arelma Inc. is a Panamanian corporation believed to have been one of the dummy firms used by Marcos to hide ill-gotten gains.
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* complete copy of court decision in pdf file click here

N.Y. Court Rules Class Can Seek to Recover Funds in Philippine Abuse Case
(reprint from LA.com /International News)

Daniel Wise

Despite a U.S. Supreme Court decision reaching the opposite result in a similar case, a state judge in Manhattan has ruled that a 10,000-member class can seek to recover $35 million located in New York to satisfy a $2 billion judgment it won in 1996 as compensation for human rights abuses committed by former Philippine President Ferdinand Marcos.

“The Supreme Court’s interpretation of federal procedure, while informative, is not binding on New York courts,” Justice Charles E. Ramos wrote in Swezey v. Merrill Lynch (pdf), 104734/09.

Ramos ruled that the class can proceed with a turnover action to recover the funds being held by Merrill Lynch, even though the class has failed to join the action by the Philippine government, which has a competing claim.

Both the Republic of the Philippines and its Presidential Commission on Good Government have refused to come into court, claiming sovereign immunity.

Ramos concluded that they cannot be forced to participate, but nevertheless held that New York’s joinder statute, CPLR §1001, permitted the case to go forward without them.

Two years ago, the U.S. Supreme Court dismissed a federal interpleader action, started by Merrill Lynch itself, to win authority to distribute the contested funds.

In Republic of the Philippines v. Pimentel, 128 S.Ct. 2180 (2007), the Court held that a federal interpleader action had to be dismissed for failure to join both the government and the commission, finding them to be indispensable parties because their sovereign interest in having their own courts resolve the dispute is “concrete.”

Joinder of a party under both state and federal law requires that it be both “necessary” and “indispensable” to the action.

Both Ramos and the U.S. Supreme Court found that the Philippine entities were necessary parties under parallel state and federal joinder rules.

But applying a complex statutory balancing, Ramos, unlike the U.S. Supreme Court, found that the parties were not “indispensable.”

The class action plaintiffs are competing with the Philippine commission to recover funds that can be traced to Marcos, members of his family and top aides.

Robert A. Swift, lead counsel to class, said the Philippine government had resisted the class’ efforts to recover on its judgment at every turn since it was entered in 1995.

“There is mean spiritedness to this,” said Swift of Kohn Swift & Graf in Philadelphia. “The Philippine government doesn’t want thousands of the Marcos regime’s human rights victims to ever receive a cent or peso.”

To date, he added, the class has recovered several million dollars over “staunch opposition” from the Philippine government.

Charles A. Rothfeld, of Mayer Brown, who is representing the Philippine National Bank, an intervenor, said that the Philippines had treated funds recovered from Marcos-era figures as “belonging generally to the government” and dedicated them to public purposes such as agrarian reform.

The good government commission was established in 1986, shortly after Marcos was deposed, to recover “ill-gotten wealth” accumulated by his regime. Since then, it has recovered $1.9 billion, according to Swift.

The class action, which represents persons who were tortured, maimed or killed during the 20 years Marcos ruled the country, won a $2 billion jury verdict in federal court in Hawaii in 1995.

The same $35 million is in dispute in both the interpleader action started in 2000 by Merrill Lynch in the U.S. District Court for the District of Hawaii and the turnover action started by the class plaintiffs this year before Ramos.

The money belongs to a Panamanian corporation set up by Marcos while he was president. The highest court in Switzerland has ruled that the Panamanian corporation was an alter ego for Marcos.

In 2008, a Philippine court ruled that the $35 million at Merrill Lynch should be forfeited to the Philippine commission. The class was denied permission to intervene in the Philippine proceeding.

Earlier this year, the class plaintiffs filed the $2 billion judgment it had recovered under the federal Alien Tort Claims Act, 28 U.S.C. §1350 et seq., with the state Supreme Court in Manhattan.

There is no judgment as yet in the Philippine case, and Marcos’ estate is appealing the ruling that the Merrill funds must be forfeited.

PARTY’S ONLY REMEDY

Ramos noted that “dismissal for non-joinder is disfavored” in New York “particularly where, as here, the party seeking relief would be left without a judicial remedy.”

The class, Ramos found, has no alternative forum other than state Supreme Court in which to resolve the competing claims to the Merrill funds.

The efforts of the class to join the Philippine proceeding was rebuffed, he found. In addition, when five class members sought to enforce the Hawaii judgment in the Philippines, their petition was dismissed for failure to file an $8.4 million filing fee.

Even though the class filed a motion to lower the filing fee, Ramos noted, a judgment dismissing the Philippine case was filed five years later without any ruling on the class’ motion. The Philippine court’s handling of the matter was found by the United Nations Human Right Committee to violate a U.N. covenant, Ramos pointed out in a footnote.

“It is certainly the Republic’s prerogative not to participate in this proceeding as a nation entitled to sovereign immunity,” Ramos wrote. But, he added, “Should it continue to elect not to participate, all other parties to this proceeding should not be forced to forego a resolution as to the disposition of this property.”

Even if the Philippine government reverses course and elects to participate in the state turnover proceeding, the class “will likely prevail because it was the first to file a judgment in New York,” said Jeffrey E. Glen, a partner at Anderson Kill & Olick, who has been local counsel for the class in the turnover proceeding.

Ramos granted permission to intervene to both Philippine National Bank and Arelma, the Panamanian corporation that holds title to the assets at Merrill.

Rothfeld, who represents Arelma as well as the bank, said his clients are considering their options.

Daniel A. McLaughlin, of Sidley Austin in New York, represented Merrill Lynch.

http://www.law.com/jsp/law/international/LawArticleIntl.jsp?id=1202435675314&NY_Court_Rules_Class_Can_Seek_to_Recover_Funds_in_Philippine_Abuse_Case

STATEMENT ON COA REPORT RE MISSING $34.14 MILLION

ILL-GOTTEN MARCOS FUNDS

Aug. 12, 2009

In behalf of the thousands of martial law victims, Claimants 1081 welcomes the COA findings disclosing the missing $34.14 million ill-gotten Marcos funds because of PCGG’s failure to submit this to the National Treasury. At the same time, we express our disappointment over the way the government has handled the ill-gotten wealth of Marcos amounting to over an estimated $654 million. All the money was supposed to have been transferred to the National Treasury from the PNB after the Supreme Court finally ruled last July 15, 2003 that the money was ill-gotten.

That $22 million of this amount, which has now grown to $34.14 million, was not submitted to the National Treasury despite a Deed of Release with Quitclaim issued by PCGG four years ago, should have been reported to the public considering that the ill-gotten wealth is intended specifically for the agrarian reform program and for the victims of martial law with the passage of the human rights compensation bill.

What adds insult to injury is the fact that this money, which has obviously been kept out of the National Treasury for litigation of PCGG cases abroad has been reportedly used for trips to Singapore and the U.S. by PCGG Chair Camilo Sabio and friends and relatives to oppose the $1.9 billion judgment of the class suit that the martial law victims had won in 1995.

I had earlier called for the COA to investigate this “hidden wealth” from the ill-gotten Marcos funds which were arbitrarily being used for junkets by friends and relatives of Camilo Sabio who himself has pending cases in the Ombudsman regarding withdrawals from funds of sequestered firms deposited in his personal account. Both Akbayan and Claimants 1081 have likewise called for the suspension of Camilo Sabio as Chair of PCGG. He has no business representing the Republic of the Philippines with cases of graft and corruption involving his acts as Chair of the PCGG.

Now that COA has let the cat out of the bag, we earnestly urge that COA order a full reimbursement by the PCGG of the missing $34.14 million and that this money be placed in the special account for the victims of human rights violations once the bill is passed into law. I had been earlier told by the National Treasury that P10 billion of the Swiss funds is kept intact in a special account but that, until such time the victims have a law passed in their favor, the money cannot be touched.

In this regard, as Chair of Claimants 1081 and in their behalf, I would like to call on Congress to please speed up the passage of the human rights compensation bill which we failed to pass in the 13^th Congress because the House of Representatives did not calendar the bill’s ratification after the Bicameral Conference, ostensibly upon orders from Malacanang.

I had the privilege and honor of talking quite briefly with the President of the Swiss Federal Republic in a reception last night given by the Swiss Embassy in his honor. I was quite impressed with the fact that he said he had repeatedly spoken about the passage of the human rights compensation bill to President Arroyo during his visit. The news in some of the broadsheets seems to confirm the assurance given me by the Swiss President and for this, again we pray and hope that by Christmas our thousands upon thousands of martial law victims will see the light at the end of the tunnel with the passage of the compensation bill into law and its signing by President Arroyo.

Etta Pargas-Rosales

Chair, Claimants 1081

Aug. 11, 2008

Marcos victims hail Singapore court ruling on $25-m deposits

Manila Standard Today – Philippines
The ruling, Rosales said, was also a big blow to the government’s claim on the $35-million Arelma case that is now being heard by the US Supreme Court. …

See all stories on this topic

Singapore Court Decision(pdf format)

FILIPINO VICTIMS OF HUMAN RIGHTS ABUSES
ELATED AGAINST THE PHILIPPINE GOVERNMENT
IN SINGAPORE; TRIAL ON THE MERITS ENSUES

Singapore Court Decision

( Pls click here to download the document in .pdf format)

Press Statement
Robert Swift
Rod C. Domingo, JR.
Filipino victims of human rights violations who scored a landmark victory against both the Republic of the Philippines (ROP) and the Philippine National Bank (PNB) in a major lawsuit in Singapore are euphoric over their recent victory concerning the recent Court of Appeal ruling that the Singapore Court has no jurisdiction to litigate in view of the government’s defense of sovereign immunity. Nine months after the appeal was briefed and argued, Chief Justice Chan Sek Keong of the Singapore Court of Appeal rendered a judgment denying the Philippine government’s sovereign immunity defense. At issue in the Singapore case is over $29 million of money originally hidden by the late President Marcos in a Swiss Bank before being transferred to Singapore. The litigation began in 2003 when West LB, a Singapore Bank, was confronted with competing claims for the money and deposited the money into the Singapore High Court. Filipino victims of human rights violations claim the money to partially satisfy their now $4.75 billion judgment against the former dictator. The government asserts that it was awarded the money by the Philippine Supreme Court in July 2003. Philippine National Bank claims it is custodian of the money for the government.

In early 2006, the Philippine government intervened into the case to try and force its dismissal by arguing it was a claimant to the money but was entitled to sovereign immunity and not subject to the jurisdiction of the Singapore Court. In a 56-page decision, Chief Justice Chan Sek Keong ruled that sovereign immunity did not apply since the bank account was not in the possession of the government.

The case now reverts to the trial court for a trial on the merits. The Philippine government now must prove that it is entitled to the money; otherwise, the martial law victims will be awarded the funds in view of its original jury award of US$4.75 billion, including accrued interest.

The 9,539 Filipino human rights violations victims are members of a class action litigated in the United States against Ferdinand E. Marcos for torture, summary execution and disappearance which resulted in a 1995 jury award which, with interest, is now worth $4.75 billion. Their judgment was affirmed on appeal.

Lead counsel Robert Swift said “this is a significant victory on the way to obtaining a final verdict for the entire $29 million. Singapore’s highest court upheld Singapore’s sovereignty to decide ownership to property located in Singapore. The tragedy is that the Philippine government opposes every effort by Filipino human rights violations victims to recover on their judgment. The Singapore decision is also noteworthy because it found for the human rights victims on the same issue which I argued for the victims in the United States Supreme Court last week involving $35 million of Marcos assets found in a Merrill Lynch account. Hopefully the U. S. Supreme Court will follow the lead of the Singapore court.”

Filipino co-counsel Rod Domingo, Jr. observed that “the Republic’s claims to the money in Singapore are sinking fast. Despite its expenditure of over $1 million in legal fees and the engagement of Singapore’s largest and most influential law firm, it is losing. I think the Singapore Court is sending a signal to the Republic that its claims are in jeopardy unless it settles with the victims.”

ROD C. DOMINGO, JR.
15/F LPL Center 130 L.P. Leviste Street
Salcedo Village Makati City 1227
Tel. Nos. (632) 813-3459
(632) 813-3497
Cellphone Nos. (0917) 813-1800
(0922) 812-0869
Fax No. (632) 812-7997
E-mail: rcdomingojr@comcast.net
rcdomingo2004@yahoo.com