Victims of Marcos Lose Bid for Dictator’s Assets

(CN) - Merrill Lynch will not have to pay $35 million to victims of human-rights abuses under the regime of Ferdinand Marcos because the current Filipino government still clings to its immunity, a New York appeals court ruled.

Osqugama Swezey and a class of plaintiffs obtained a judgment in Hawaii federal court in 1995.

In 2009, the plaintiffs asked a New York court to force Merrill Lynch to turn over money held by Arelma Inc., a Panamanian firm formerly controlled by Marcos.

Arelma and the Philippine National Bank, which holds Arelma's funds in escrow, intervened in the case, however, and asked for it to be dismissed.

They argued that the lawsuit could not continue without the participation of two indispensible parties that enjoy sovereign immunity: the Republic of the Philippines and one of its agencies, the Philippine Presidential Commission on Good Government.

The justices of the Manhattan-based First Department New York Appellate Division agreed that the case could not continue without the participation of the Filipino government.

"The Republic should be a party to this proceeding, but by virtue of its sovereign immunity, cannot be made a party without its consent," Justice David Friedman wrote for a five-member panel. "Given that the republic has to date refused to participate in this proceeding (as is its right), we conclude, as did the United States Supreme Court in an earlier proceeding concerning ownership of the same assets (Republic of the Philippines v. Pimentel, 553 US 851 [2008]), that respect for the principles of sovereign immunity and international comity mandates dismissal." (Parentheses and citation in original.)

During Marcos' 21-year authoritarian regime, he subjected thousands of Filipinos who stood in his way to torture, murder, rape and imprisonment. Marcos fled the Southeast Asian nation in February 1986 and died Sept. 29, 1989, of cardiac arrest in exile on Honolulu.

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