US Supreme Court sets oral argument for Marcos Arelma account

MANILA, Philippines – The United States Supreme Court has set oral arguments on March 17 to determine the real owners of the $35 million in the name of the Panama-based Arelma Corp., supposedly a dummy of the late President Ferdinand Marcos.

Solicitor General Agnes Devanadera said the Philippine government is confident of convincing the US Supreme Court that the account was part of the ill-gotten wealth of  Marcos.

“It is a very rare occasion,” she said. “Out of the thousands filed before the US Supreme Court, very few are heard. That means the issue is worth hearing.”

Documents recovered by the Presidential Commission on Good Government (PCGG) showed that in 1972, Marcos ordered the creation of Arelma Inc., where he transferred $2 million in funds from his alleged Swiss accounts, according to the Office of the Solicitor General.

Due to accruing interests and account investment earnings, the fund has now grown to approximately $35 million.

In 1986, the Philippine government succeeded in asking the Swiss government to freeze the Arelma account pending the determination of ownership.

As the account is also being claimed by human rights victims of martial law, Merrill Lynch filed an interpleader before the Hawaii District Court.

An interpleader is a legal remedy where a disinterested stakeholder in possession of property claimed by two or more persons may require them to litigate the claims of each without embroiling him or her in the controversy.

The Philippine government blocked the move, asserting sovereign immunity from suits.

“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,” Devanadera said.

On May 4, 2006, however, the 9th Circuit of the US Court of Appeals that took over the litigation of the case dismissed the claims from the Philippine government on grounds that sovereign immunity could not block an interpleader action.

Last March 5, the Philippine government then filed a petition for a writ of certiorari to vacate decision of the appellate court.

“To sustain the exclusion of the Republic from the interpleader case would amount to deprivation of its right without due process of the law over which it had acquired vested rights to recover under binding international covenants,” Devanadera said.

The human rights victims want the $35 million to serve as initial reparation after the Hawaii District Court ordered that they be indemnified in the sum of $2 billion.  – Mike Frialde