Concept: Doctrine of Primary Jurisdiction
Facts:
· Industrial Enterprises Inc. (IEI) was granted
a coal operating contract by the Bureau of Energy Development (BED), for the
exploration of two coal blocks in Eastern Samar. IEI asked the Ministry of Energy for another to contract for the
additional three coal blocks.
· IEI was advised that there is another coal
operator, Marinduque Mining and Industrial Corporation (MMIC). IEI and MMIC
signed a Memorandum of Agreement on which IEI will assign all its rights and
interests to MMIC.
· IEI filed for rescission of the memorandum
plus damages against the MMIC and the Ministry of Energy Geronimo Velasco
before the RTC of Makati, alleging that MMIC started operating in the coal
blocks prior to finalization of the memorandum. IEI prayed for that the rights
for the operation be granted back.
· Philippine National Bank (PNB) pleaded as
co-defendant because they have mortgages in favor of MMIC. It was dismissed
· Oddly enough, Mr. Jesus Cabarrus is President
of both IEI and MMIC.
· RTC ordered the rescission of the memorandum
and for the reinstatement of the contract in favor of IEI.
· CA reversed the ruling of the RTC, stating
that RTC has no jurisdiction over the matter.
Issue: W/ON
RTC has jurisdiction?
Held: No. While the action filed
by IEI sought the rescission of what appears to be an ordinary civil contract
cognizable by a civil court, the fact is that the Memorandum of Agreement
sought to be rescinded is derived from a coal-operating contract and is inextricably
tied up with the right to develop coal-bearing lands and the determination of
whether or not the reversion of the coal operating contract over the subject
coal blocks to IEI would be in line with the integrated national program for
coal-development and with the objective of rationalizing the country's over-all
coal-supply-demand balance, IEI's cause of action was not merely the rescission
of a contract but the reversion or return to it of the operation of the coal
blocks. Thus it was that in its Decision ordering the rescission of the
Agreement, the Trial Court, inter alia, declared the continued
efficacy of the coal-operating contract in IEI's favor and directed the BED to
give due course to IEI's application for three (3) IEI more coal blocks. These
are matters properly falling within the domain of the BED.
In recent years, it has been the jurisprudential trend to
apply the doctrine of primary jurisdiction in many cases involving matters that
demand the special competence of administrative agencies. It may occur that the
Court has jurisdiction to take cognizance of a particular case, which means
that the matter involved is also judicial in character. However, if the case is
such that its determination requires the expertise, specialized skills and knowledge
of the proper administrative bodies because technical matters or intricate
questions of facts are involved, then relief must first be obtained in an
administrative proceeding before a remedy will be supplied by the courts even
though the matter is within the proper jurisdiction of a court. This is the
doctrine of primary jurisdiction. It applies "where a claim is originally
cognizable in the courts, and comes into play whenever enforcement of
the claim requires the resolution of issues which, under a regulatory scheme,
have been placed within the special competence of an administrative body, in
such case the judicial process is suspended pending referral of such
issues to the administrative body for its view"
Clearly,
the doctrine of primary jurisdiction finds application in this case since the
question of what coal areas should be exploited and developed and which entity
should be granted coal operating contracts over said areas involves a technical
determination by the BED as the administrative agency in possession of the
specialized expertise to act on the matter. The Trial Court does not have the
competence to decide matters concerning activities relative to the exploration,
exploitation, development and extraction of mineral resources like coal. These
issues preclude an initial judicial determination. It behooves the courts to
stand aside even when apparently they have statutory power to proceed in
recognition of the primary jurisdiction of an administrative agency.
Original source and full text: http://www.lawphil.net/judjuris/juri1990/apr1990/gr_88550_1990.html
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