PLDT unit granted reprieve for Subic zone operations

THE Supreme Court has remanded to the trial court the issue of whether the Subic Telecommunications Co. Inc (Subictel), a wholly owned subsidiary of the Philippine Long Distance Telecommunications Co. Inc., has the right to exclusively provide telco services inside the Subic Bay Freeport Zone.

In a 17-page decision penned by Associate Justice Presbitero Velasco Jr., the Court’s Third Division reversed and set aside the ruling of the Court of Appeals (CA) issued on April 4, 2008 which upheld the resolution of the Regional Trial Court (RTC) of Olongapo City dismissing Subictel’s complaint for “specific performance with prayers for temporary restraining order and preliminary injunction” against Subic Bay Metropolitan Authority and Innove Communications Inc., a subsidiary telecommunications of Globe Telecom.

The appellate court agreed with the Olongapo RTC in junking the complaint filed by Subictel on the ground of “litis pendentia” or pending suit and forum shopping in its decision issued on June 30, 2006.

It held that the parties’ issues raised as well as the relief being sought by Subictel in the administrative case it filed with the Subic Bay Metropolitan Authority (SBMA) are the same with the civil case it filed before the lower court.

The High Tribunal, however, said both the CA and the trial court erred in issuing the ruling, thus, directed the RTC, Branch 74 in Olongapo City to continue with the proceedings of the civil case filed by Subictel and resolve it with dispatch.

“In ruling on the presence of litis pendentia, both the trial and appellate courts, however, overlooked the fact that there is more determining the identity of the causes of action than an identity of the documentary evidence presented by Subictel. But the more fundamental question to consider is whether or not the cause of action in the second case existed at the time the filing of the first case,” the SC stressed.

Concurring with the ruling were Associate Justices Antonio Carpio, Minita Chico-Nazario, Antonio Eduardo Nachura and Diosdado Peralta.

In the administrative case, the SC noted, Subictel sought the reconsideration of SBMA’s order giving Innove a provisional permit to operate international and leased lines services as well as local exchange and toll services.

SBMA was not a party to the case but was the quasi-judicial body hearing the Innove’s application for Certificate of Public Convenience and Necessity (CPCN), while Subictel intervened in said case as oppositor to Innove’s application.

But in the civil case filed before the Olongapo RTC, SBMA was the principal party while Innove was impleaded for having been granted a temporary franchise by SBMA.

“Thus, as between the administrative case and the civil case, there was no identity of parties,” the Court stressed.

The SC also held that the relief being sought by Subictel in the administrative case was different from the one prayed for in the civil case.

The remedies sought in administrative case, according to the SC, hinge on the acceptance by SBMA of Innove’s application for CPCN and the consequent proceedings on the matter while the civil case was triggered by the denial by SBMA of Subictel’s notices to exercise the renewal of its alleged exclusivity rights under the joint venture agreement.

“From the foregoing distinction, it is clear that there is, as between the two actions, no identity of rights asserted and relief prayed for; and the facts whence the reliefs are sought are different,” the Court explained.

Subictel anchored its claim for exclusive privilege to operate telecommunication services inside the Subic Freeport on the joint venture agreement (JVA) it signed with the SBMA on June 29, 1994 which is valid for 25 years and renewable for another 25 years.

The JVA was inked following the withdrawal of the US military forces in Subic in the aftermath of Mount Pinatubo eruption in 1991.

The agreement further provides that for a period of 10 years, the SBMA would not allow third parties to engage in any activity within the freeport zone, which could impair Subictel’s operation.

It likewise gave Subictel the option to renew its exclusivity privilege for three-year periods.

On April 22, 2004, Subictel notified SBMA that it was exercising its option to renew its exclusivity privilege under the JVA for another five years.

Subictel, however, learned that SBMA had started accepting applications for third parties for CPCN to provide international and leased line services and local and toll services

Despite its opposition, SBMA did not recognize Subictel’s option to renew its exclusive privilege and gave Innove provisional authority to compete with Subictel.

The SBMA board asserted that it was just exercising its power to regulate public utilities within the Freeport Zone pursuant to Republic Act 7227 or the Bases Conversion Development Act of 1992.

Innove, on the other hand, claimed that all authorities to operate public utilities are, by constitutional mandate, nonexclusive.

It added that Subictel failed to prove that its entry into the zone would cause grave and irreparable damage. Written by Joel R. San Juan / Business Mirror Reporter

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