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May 25, 2004 | J.

Tinga | Force Majeur


PETITIONER: Philippine Communications Satellite Corporation
RESPONDENT: Globe Telecom, Inc.
SUMMARY:
Respondent Globe was contracted by US to provide communication services for the latters defense in PH. Respondent Globe then
engaged Petitioner Philcomsat as local service provider. They entered Agreement in 1991 for 5 year contract. In 1992, US left the
Philippines. Petitioner then demanded for the Respondents standing obligation of $5M. Respondent cry force majeur.
DOCTRINE:
Obligor is exempted from liability due to force majeur circumstannces.

FACTS:
1. Respondent Globe is provider of
communications facilities for US bases in Clark
and Subic for the US Defense Communication
Agency.
2. Respondent Globe then contracted with local
service provider Philippine Communications
Satellite Corporation (Philcomsat) for the
provision of communication facilities.
3. On May 7, 1991, Petitioner Philcomsat and
Respondent Globe entered into AGREEMENT
to provide earth station for 5 years. They knew
then that the Military Base Agreement was to
expire in 1991.
4. In September 1991, Senate did not renew the
Military Base Agreement.
5. In August 1992, Globe notified Philcomsat of
its intention to discontinue Agreement citing
force majeur. This is provided for in Sec. 8
[Default] of the said Agreement.
6. US was set to leave by December, 1992.
7. After the US left, Philcomsa demanded out
from Globe the standing obligation of $5M
from the Agreement. Philcomsat filed suit.in
RTC.
8. RTC ordered Globe to pay Philcomsat $92
(rentals for the month of Dec. 1992).
9. CA ruled that the occurrence of Senats nonratification was indeed force majeur. But CA
still held Globe liable to US rent of $92K for
the month of December, 1992.
10. They raised to Court via Petition for
Review.

ISSUE:

1. Whether or not US withdrawal


following Senates non-ratification
constituted force majeur?
RULING: CA decision AFFIRMED.
RATIO:
1. Article 1174 of the Civil Code exempts
Obligor from liability due to force majeur
which are unforeseeable or unavoidable.
2. Section 8 of the Agreement also states
laws, order of the Philippine government as
force majeur. Nothing in Section 8 runs contrary
to Art. 1174 of the Civil Code.
3. Requisites for Force Majeur: a) Event is
independent of human will; b) Event must
render impossible for Debtor to fulfill
obligation in normal manner; c) Obligor must
be free of participation or aggravation of injury
to the Creditor. (NOTE: Case did not include
the unforeseeable and unavoidable aspect.)
4. Both parties had no control over the nonrenewal of the Bases Agreement for the
prerogative to do so belonged to Philippine
Senate. Nor did they have control of the US
withdrawal in December 1992.
5.
Events made it impossible for the
continuation of the Agreement until the end of
the 5-year term without fault of either party.

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