ARTICLE X SECTION 4.

SUPERVISION BY THE PRESIDENT PROVINCE OF

NEGROS V. COA, GR NO. 182574, SEPTEMBER 28, 2010
FACTS: THE SANGGUNIANG PANGLALAWIGAN OF NEGRO OCCIDENTAL
PASSED A RESOLUTION ALLOCATING 4-MILLION OF ITS RETAINED
EARNINGS FOR THE HEALTHCARE OF THE EMPLOYEES OF THE PROVINCE.
THE INSURANCE COVERAGE WAS AWARDED TO PHILAM CARE. THE
PROVINCIAL AUDITOR, HOWEVER, ISSUED A NOTICE OF SUSPENSION FOR
THE AGREEMENT BETWEEN PHILAM CARE AND THE PROVINCE OF NEGROS
FOR LACK OF APPROVAL FROM THE PRESIDENT. THE PRESIDENT THEN
ORDERED THAT THE SUSPENSION BE LIFTED UP TO THE AMOUNT OF
100,000, HOWEVER, THE COMMISSION ON AUDIT IGNORE THE
PRESIDENTIAL DIRECTIVE. UNDER AO 103, NO GOVERNMENT ENTITY,
INCLUDING A LOCAL
GOVERNMENT UNIT, IS EXEMPT FROM SECURING PRIOR APPROVAL FROM
THE PRESIDENT GRANTING ADDITIONAL BENEFITS TO ITS PERSONNEL.
THIS IS IN CONFORMITY WITH THE POLICY OF STANDARDIZATION OF
COMPENSATION LAID DOWN IN RA 6758.
ISSUE: WHETHER OR NOT ADMINISTRATIVE ORDERS APPLIES TO LGU
HELD: NO. THE PRESIDENT CAN ONLY EXERCISE GENERAL SUPERVISION
OVER THE LGUS WHICH IS THE POWER OF A SUPERIOR OFFICER TO SEE TO
IT THAT SUBORDINATES PERFORM THEIR FUNCTIONS ACCORDING TO LAW.
AN ADMINISTRATIVE ORDER DOES NOT APPLY TO LGUS BUT ONLY TO
GOVERNMENT OFFICES/AGENCIES, AND GOCCS WHICH ARE UNDER THE
CONTROL OF THE PRESIDENT. THE GRANT OF ADDITIONAL COMPENSATION
LIKE HEALTH INSURANCE BENEFITS DOES NOT NEED THE PRIOR
APPROVAL OF THE PRESIDENT.

ARTICLE X SECTION 6. SHARE IN NATIONAL TAXES LEAGUE OF CITIES V.

COMELEC AUGUST 24, 2010
FACTS: ON NOVEMBER 18, 2008, THE SUPREME COURT EN BANC STRUCK
DOWN THE SUBJECT OF 16 CITYHOOD LAWS FOR VIOLATING SECTION 10,
ARTICLE X OF THE 1987 CONSTITUTION AND THE EQUAL PROTECTION
CLAUSE.
ON MARCH 31, 2009, THE SUPREME COURT DENIED
RESPONDENTS FIRST MOTION FOR RECONSIDERATION. ON APRIL 28, 2009,
THE SUPREME COURT DENIED RESPONDENTS SECOND MOTION FOR
RECONSIDERATION. ACCORDINGLY, THE NOVEMBER 18 DECISION BECAME
FINAL AND EXECUTORY.
HOWEVER, THE COURT EN BANC,
UNPRECEDENTEDLY REVERSED THE NOVEMBER 18 DECISION BY
UPHOLDING THE CONSTITUTIONALITY OF THE CITYHOOD LAWS IN ITS
DECEMBER 21, 2009 DECISION.
ISSUE: WHETHER OR NOT THE 16 CITYHOOD LAWS IS CONSTITUTIONAL
HELD: THE COURT HELD THAT THE 16 CITYHOOD LAWS IS
UNCONSTITUTIONAL, STATING THAT SECTION 10, ARTICLE X OF THE
CONSTITUTION EXPRESSLY PROVIDES THAT NO XXX CITY SHALL BE
CREATED XXX EXCEPT IN ACCORDANCE WITH THE CRITERIA
ESTABLISHED IN THE LOCAL GOVERNMENT CODE. THIS PROVISION CAN
ONLY BE INTERPRETED IN ONE WAY, THAT IS, ALL THE CRITERIA FOR THE
CREATION OF CITIES MUST BE EMBODIED EXCLUSIVELY IN THE LOCAL
GOVERNMENT CODE. IF THE CRITERIA IN CREATING LGUS ARE NOT
UNIFORM AND DISCRIMINATORY, THERE CAN BE NO FAIR AND JUST
DISTRIBUTION OF THE NATIONAL TAXES TO LGUS.
THE
UNCONSTITUTIONALITY OF THE CITYHOOD LAWS LIES IN THE FACT THAT
CONGRESS PROVIDED AN EXEMPTION CONTRARY TO THE EXPRESS
LANGUAGE OF THE CONSTITUTION.
IN OTHER WORDS, CONGRESS
EXCEEDED AND ABUSED ITS LAW- MAKING POWER, RENDERING THE
CHALLENGED CITYHOOD LAW VOID FOR BEING VIOLATIVE OF THE
CONSTITUTION.

ARTICLE X SECTION 15. AUTONOMOUS REGIONS

ABAS KIDA V. SENATE OF THE PHILIPPINES, GR NO. 196271, OCTOBER 18,
2011
FACTS: ON JUNE 30, 2011, REPUBLIC ACT (RA) NO. 10153, ENTITLED AN
ACT PROVIDING FOR THE SYNCHRONIZATION OF THE ELECTIONS IN THE
AUTONOMOUS REGION IN MUSLIM MINDANAO (ARMM) WITH THE
NATIONAL AND LOCAL ELECTIONS AND FOR OTHER PURPOSES WAS
ENACTED.THE LAW RESET THE ARMM ELECTIONS FROM THE 8TH OF
AUGUST 2011, TO THE SECOND MONDAY OF MAY 2013 AND EVERY THREE
(3) YEARS THEREAFTER, TO COINCIDE WITH THE COUNTRYS REGULAR
NATIONAL AND LOCAL ELECTIONS. THE PETITIONERS ASSAILED THE
CONSTITUTIONALITY OF RA NO. 10153.
ISSUE: W/N RA 10153 VIOLATES THE AUTONOMY GRANTED TO ARMM.
HELD: NO. THE LAW IS CONSTITUTIONAL.THE CONSTITUTION IS TO BE
INTERPRETED AS A WHOLE AND ONE MANDATE SHOULD NOT BE GIVEN
IMPORTANCE OVER THE OTHER EXCEPT WHERE THE PRIMACY OF ONE
OVER THE OTHER IS CLEAR.WHILE AUTONOMOUS REGIONS ARE GRANTED
POLITICAL AUTONOMY, THE FRAMERS OF THE CONSTITUTION NEVER
EQUATED AUTONOMY WITH INDEPENDENCE. THE ARMM AS A REGIONAL
ENTITY THUS CONTINUES TO OPERATE WITHIN THE LARGER FRAMEWORK
OF THE STATE AND IS STILL SUBJECT TO THE NATIONAL POLICIES SET BY
THE NATIONAL GOVERNMENT, SAVE ONLY FOR THOSE SPECIFIC AREAS
RESERVED BY THE CONSTITUTION FOR REGIONAL AUTONOMOUS
DETERMINATION.IN OTHER WORDS, THE AUTONOMY GRANTED TO THE
ARMM CANNOT BE INVOKED TO DEFEAT NATIONAL POLICIES AND
CONCERNS. SINCE THE SYNCHRONIZATION OF ELECTIONS IS NOT JUST A
REGIONAL CONCERN BUT A NATIONAL ONE, THE ARMM IS SUBJECT TO IT;
THE REGIONAL AUTONOMY GRANTED TO THE ARMM CANNOT BE USED TO
EXEMPT THE REGION FROM HAVING TO ACT IN ACCORDANCE WITH A
NATIONAL POLICY MANDATED BY NO LESS THAN THE CONSTITUTION.

ARTICLE XI
SALUMBIDES v. OFFICE OF THE OMBUDSMANG. R. No. 180917, April 23, 2010
Carpio Morales, J.:
Doctrine:
The Court should never remove a public officer for acts done prior to his present term
ofoffice. To do otherwise would be to deprive the people of their right to elect their
officers. Whenthe people elected a man to office, it must be assumed that they did this
with knowledge of hislife and character, and that they disregarded or forgave his faults or
misconduct, if he had beenguilty of any.
Facts:
Salumbides and Glenda who were both appointed in July 2001 as Municipal
LegalOfficer/Administrator and Municipal Budget Officer, respectively of Tagkawayan,
Quezon, andMayor Vicente Salumbides III were administratively charged with with
Dishonesty, GraveMisconduct, Gross Neglect of Duty, Conduct Prejudicial to the Best
Interest of the Service, andviolation of the Commission on Audit (COA) Rules and the
Local Government Code.This is with regards to the construction of a two-classroom
building with fence for theTagkawayan Municipal High School (TMHS) since the public
school in the poblacion area wouldno longer admit high school freshmen starting school
year 2002-2003. This was done withoutany approved appropriation and ahead of the
public bidding. The Office of the Ombudsmandropped the mayor and Coleta, both
elective officials, as respondents in the administrative case,the 2004 elections having
mooted the case.
Issue:
Whether or not the Doctrine of Condonation shall expand to cover coterminous
appointiveofficials who were administratively charged along with the reelected
official/appointing authoritywith infractions allegedly committed during their preceding
term.
Ruling:
No. The underlying theory is that each term is separate from other terms, and that the
reelection to office operates as a condonation of the officers previous misconduct to the
extent of cuttingoff the right to remove him therefor. Election expresses the sovereign
will of the people. Underthe principle of vox populi est suprema lex, the re-election of a
public official may, indeed,supersede a pending administrative case.The same cannot be
said of a re-appointment to a non-career position. Substantial distinctionsclearly exist
between elective officials and appointive officials. The former occupy their office
byvirtue of the mandate of the electorate. They are elected to an office for a definite term
and maybe removed therefrom only upon stringent conditions. On the other hand,
appointive officialshold their office by virtue of their designation thereto by an appointing
authority. Someappointive officials hold their office in a permanent capacity and are
entitled to security of tenurewhile others serve at the pleasure of the appointing authority.

ARTICLE XI SECTION 13. POWERS; FUNCTIONS; DUTIES

OMBUDSMAN V. RODRIGUEZ, GR NO. 172700, JULY 23, 2010
FACTS: ON 26 AUGUST 2003, THE OMBUDSMAN RECEIVED A COMPLAINT
FOR ABUSE OF AUTHORITY, DISHONESTY, OPPRESSION, MISCONDUCT IN
OFFICE, AND NEGLECT OF DUTY AGAINST ROLSON RODRIGUEZ, PUNONG
BARANGAY IN BRGY. STO. ROSARIO, BINALBAGAN, NEGROS OCCIDENTAL.
ON 1 SEPTEMBER 2003, THE SANGGUNIANG BAYAN OF BINALBAGAN,
NEGROS OCCIDENTAL, THROUGH VICE-MAYOR JOSE G. YULO, RECEIVED A
SIMILAR COMPLAINT AGAINST. IN ITS 29 JANUARY 2004 ORDER, THE
OMBUDSMAN DIRECTED BOTH PARTIES TO FILE THEIR RESPECTIVE
VERIFIED POSITION PAPERS. IN HIS POSITION PAPER, RODRIGUEZ INSISTED
THAT THE SANGGUNIANG BAYAN STILL CONTINUED TO EXERCISE
JURISDICTION OVER THE COMPLAINT FILED AGAINST HIM.
ISSUE: WHETHER OR NOT IT WAS THE SANGGUNIANG BAYAN OR THE
OMBUDSMAN THAT FIRST ACQUIRED JURISDICTION.
HELD: THE PETITION HAS MERIT. ACCORDING TO THE CONSTITUTION THE
OMBUDSMAN SHALL HAVE THE FOLLOWING POWERS, FUNCTIONS, AND
DUTIES: INVESTIGATE ON ITS OWN, OR ON COMPLAINT BY ANY PERSON,
ANY ACT OR OMISSION OF ANY PUBLIC OFFICIAL, EMPLOYEE, OFFICE, OR
AGENCY, WHEN SUCH ACT OR OMISSION APPEARS TO BE ILLEGAL, UNJUST,
IMPROPER, OR INEFFICIENT.THE PRIMARY JURISDICTION OF THE
OMBUDSMAN TO INVESTIGATE ANY ACT OR OMISSION OF A PUBLIC
OFFICER OR EMPLOYEE APPLIES ONLY IN CASES COGNIZABLE BY THE
SANDIGANBAYAN. IN CASES COGNIZABLE BY REGULAR COURTS, THE
OMBUDSMAN
HAS
CONCURRENT
JURISDICTION
WITH
OTHER
INVESTIGATIVE AGENCIES OF GOVERNMENT.

ARTICLE XII
Section 11. Public Utilities:Francisco vs. TRB, G.R. No. 166910, Oct. 19, 2010
Facts: In 1977, Pres. Marcos issued P.D. 1112, authorizing the establishment of toll
facilities on public improvements. Itacknowledged the huge financial requirements and
the need to tap into the resources of the private sector to implement the program.In order
to attract the private sector, P.D. 1112 created the Toll Regulatory Board (TRB) and
allowed the collection of toll fees for theuse of certain public improvements, allowing a
reasonable rate of ROI. P.D.1113 was also issued, granting to PNCC a franchise
toconstruct toll facilities with a right to collect fees as the TRB may fix. TRB and PNCC
signed an agreement for the operation of theexpressway. In 1983, PNCC was granted a
franchise over MMEX. As stated in the previous P.D.s. PNCC may sell its franchise
uponthe Presidents approval, then came the 1987 Constitution with its franchise
provision. Petitioners assail the constitutionality ofSections 3 (a) and (d) of P.D. 1112 in
relation to Section 8 (b) of P.D. 1894 insofar as they vested the TRB, on one hand,toll
operationawarding power while, on the other hand, granting it also the power to issue,
modify and promulgate toll rate charges. The TRB, sopetitioners bemoan, cannot be an
awarding party of a TOA and, at the same time, be the regulator of the toll way industry
and anadjudicator of rate exactions disputes.
Issue: Is the authority to grant public utility franchise an exclusive legislative power? Can
it be delegated? Is a congressionalfranchise necessary before a public utility may operate?
Ruling: A franchise is basically a legislative grant of a special privilege to a person,
which includes not only authorizations issuingdirectly from Congress in the form of
statute, but also those granted by administrative agencies to which the power to grant
franchisehas been delegated by Congress. The power to authorize and control a public
utility is admittedly a prerogative that stems from theLegislature. Any suggestion,
however, that only Congress has the authority to grant a public utility franchise is less
than accurate. Asstressed in Albano v. Reyes, there is nothing in the Constitution
remotely indicating the necessity of a congressional franchise beforeeach and every
public utility may operate. That the Constitution provides that the issuance of a franchise,
certificate or other form ofauthorization for the operation of a public utility shall be
subject to amendment, alteration or repeal by Congress does notnecessarily imply that
only Congress has the power to grant such authorization. In such a case, therefore, a
special franchise directlyemanating from Congress is not necessary if the law already
specifically authorizes an administrative body to grant a franchise or toaward a contract.
Under the 1987 Constitution, Congress has an explicit authority to grant a public utility
franchise. However, it mayvalidly delegate its legislative authority, under the power of
subordinate legislation, to issue franchises of certain public utilities tosome
administrative agencies.

ARTICLE XII SECTION 11. PUBLIC UTILITIES

GAMBOA V. TEVES, 652 SCRA 690
FACTS: THIS IS A PETITION TO NULLIFY THE SALE OF SHARES OF STOCK OF
PHILIPPINE TELECOMMUNICATIONS INVESTMENT CORPORATION (PTIC) BY
THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES, ACTING
THROUGH THE INTER-AGENCY PRIVATIZATION COUNCIL (IPC), TO METRO
PACIFIC ASSETS HOLDINGS, INC. (MPAH), AN AFFILIATE OF FIRST PACIFIC
COMPANY LIMITED (FIRST PACIFIC), A HONG KONG- BASED INVESTMENT
MANAGEMENT AND HOLDING COMPANY AND A SHAREHOLDER OF THE
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY (PLDT). THE
PETITIONER QUESTIONED THE SALE ON THE GROUND THAT IT ALSO
INVOLVED AN INDIRECT SALE OF 12 MILLION SHARES (OR ABOUT 6.3
PERCENT OF THE OUTSTANDING COMMON SHARES) OF PLDT OWNED BY
PTIC TO FIRST PACIFIC. WITH THE THIS SALE, FIRST PACIFICS COMMON
SHAREHOLDINGS IN PLDT INCREASED FROM 30.7 PERCENT TO 37 PERCENT,
THEREBY INCREASING THE TOTAL COMMON SHAREHOLDINGS OF
FOREIGNERS IN PLDT TO ABOUT 81.47%. THIS, ACCORDING TO THE
PETITIONER, VIOLATES SECTION 11, ARTICLE XII OF THE 1987 PHILIPPINE
CONSTITUTION WHICH LIMITS FOREIGN OWNERSHIP OF THE CAPITAL OF A
PUBLIC UTILITY TO NOT MORE THAN 40%.
ISSUE: WHETHER OR NOT THE TERM CAPITAL IN SECTION 11, ARTICLE
XII OF THE CONSTITUTION REFERS TO THE TOTAL COMMON SHARES ONLY,
OR TO THE TOTAL OUTSTANDING CAPITAL STOCK OF PLDT, A PUBLIC
UTILITY?
HELD: THE TERM CAPITAL IN SECTION 11, ARTICLE XII OF THE
CONSTITUTION REFERS ONLY TO COMMON SHARES. HOWEVER, IF THE
PREFERRED SHARES ALSO HAVE THE RIGHT TO VOTE IN THE ELECTION OF
DIRECTORS, THEN THE TERM CAPITAL SHALL INCLUDE SUCH
PREFERRED SHARES BECAUSE THE RIGHT TO PARTICIPATE IN THE
CONTROL OR MANAGEMENT OF THE CORPORATION IS EXERCISED
THROUGH THE RIGHT TO VOTE IN THE ELECTION OF DIRECTORS. THE
SUPREME COURT RULED AND PARTLY GRANT THE TERM CAPITAL IN
SECTION 11, ARTICLE XII OF THE CONSTITUTION REFERS ONLY TO SHARES
OF STOCK THAT CAN VOTE IN THE ELECTION OF DIRECTORS, AND THUS IN
THE PRESENT CASE ONLY TO COMMON SHARES, AND NOT TO THE TOTAL
OUTSTANDING CAPITAL STOCK (COMMON AND NON-VOTING PREFERRED
SHARES).

ARTICLE XII: Section 16. GOCC and Economic Viability:

BSP vs. COA, G.R. No. 177131, June 7, 2011
Facts: The COA issued a resolution in 1999 defining its policy with respect to the audit of
the Boy Scouts of the Philippine, whichwas created as a public corporation and that in
BSP vs.NLRC, the SC ruled that the BSP, as constituted under its charter, was aGOCC
within the meaning of Art. IX (B) (2) (1) of the Constitution, and that the BSP is regarded
as a government instrumentalityunder the Administrative Code. For the purposes of audit
supervision, the BSP shall be classified among the governmentcorporations to be audited
by employing the team audit approach. The BSP sought reconsideration of the COA
Resolution in a lettersigned by then BSP National President Jejomar C. Binay, saying that
it is not subject to the COAs jurisdiction.
Issues: a.) Is CA. no. 111, as amended by R.A. 7278 constitutional and consistent with
section 16, Article XII of the constitution? b.) Does the test of economic viability apply to
public corporations dealing with governmental functions?
Ruling: a.) Yes. The BSP (CA no. 111, as amended by RA 7278) is a public corporation or
a government agency or instrumentalitywith juridical personality, which does not fall
within the constitutional prohibition in Article XII, Section 16, notwithstanding
theamendments to its charter. Not all corporations, which are not government owned or
controlled, are ipso facto to be consideredprivate corporations as there exist another
distinct class of corporations or chartered institutions which are otherwise known
as"public corporations." These corporations are treated by law as agencies or
instrumentalities of the government which are not subjectto the tests of ownership or
control and economic viability but to different criteria relating to their public
purposes/interests orconstitutional policies and objectives and their administrative
relationship to the government or any of its Departments or Offices. b.) No. Section 16,
Article XII deals with the formation, organization, or regulation of
privatecorporations, which should be done through a general law enacted by Congress,
provides for an exception, that is: if thecorporation is government owned or controlled;
its creation is in the interest of the common good; and it meets the test of
economicviability. The rationale behind Article XII, Section 16 of the 1987 Constitution
was explained in Feliciano v. Commission on Audit,Art. XII, Sec. 16 bans the creation of
private corporations by special law, however said constitutional provision should not
beconstrued so as to prohibit the creation of public corporations or a corporate agency or
instrumentality of the government intendedto serve a public interest or purpose. This
should not be measured on the basis of economic viability, but according to the
publicinterest or purpose it serves as envisioned by par. 2, Art. 44 of the Civil Code, and
of the Administrative Code.

U.P. v. Dizon 679 SCRA 54 (2012)

FACTS
Petitioner UP contracted respondent Stern Builders Inc. for the extension and renovation
of the CASBuilding in UPLB. When UP failed to pay in the amount of P273k due COA
disallowance, respondent filed a case against UPin RTC QC that resulted in the decision
to garnish public funds amounting to P16M. On Nov 28, 2001 RTC rendered a decision
in favor of respondent. UP failed to file an appeal during the15-day reglementary period
after promulgation of said decision. UP files for appeal only on June 3 2002, arguing that
the UP OLS only received a copy May 31 2002.RTC denied said appeal since it has been
filed out of time. RTC issues writ of execution Oct 4 2002, UP files to CA and SC for
certiorari to assail decision due to the denial of due course petition denied On Dec 21
2004, RTC respondent Judge Dizon orders for the release of garnished funds of UP. On
Jan 10 2005, UP files for certiorari to assail said decision to CA petition granted and
TRO filed. After 60-day TRO, RTC directs sheriff to receive the check from DBP. On
July 8, 2005 Respondent Dizon ordered the non-withdrawal of check on basis the
certiorari ispending. On Sept 16 2005, UP files for certiorari denied on Dec 2005 but
UP files for petition for review, On Jan 2006, Dizon denies motion to withdraw since UP
is filing for petition to CA. On Jan 3 2007, RTC Judge Yadao (replaced Dizon) now
ordered the withdrawal. On Jan 22 2007, UP filed for TRO to SC granted. UP files
petition of review for RTC decision to withdraw funds
ISSUES:
WoN the finality of the Nov 28 2001 decision can be challenged
WoN the fresh-period rule announced in Neypes v CA can be given retroactive
application
HELD:
Can the finality of the Nov 28 2001 decision be challenged?
YES. As a general rule, once a decision has become final and executory, the
prevailing party should notbe deprived of reaping the fruits of victory. But an exception
to this would be when circumstancestranspire after the finality of the decision to render
the execution unjust and inequitable. In the present case, SC rules that the non-acceptance
of RTC to the appeal made by UP for the Nov 28, 2001 decision was inequitable and was
a clear violation to UPs right to due process:
Can the fresh-period rule announced in Neypes v CA be given retroactive application?
YES. The retroactive effect of a procedural law does not come within the legal
conception of retroactivity or is not subject to the general rule prohibiting the
retroactive operation of statutes (Sec4, NCC) rather, its retroactivity is already given
since, by the nature of rules of procedure, no vestedright is impinged in its application

(Sec 2252, NCC)

In the present case, the retroactive application of the fresh-period rule need not even
be questionedsince the rule came into effect in 1998 by the Neypes v CA judgment
ARTICLE VXI SECTION 3. IMMUNITY FROM SUIT
SHELL PHILIPPINES V. JALOS, GR NO. 179918, SEPTEMBER 8, 2010
FACTS: THIS IS A CASE AGAINST A PETROLEUM CONTRACTOR (SHELL
PHILIPPINES EXPLORATION), WHOSE PIPELINE OPERATION HAS
ALLEGEDLY DRIVEN THE FISH AWAY FROM COASTAL AREAS, INFLICTING
LOSS OF EARNINGS AMONG FISHERMEN. PETITIONER SHELL PHILIPPINES
EXPLORATION AND THE REPUBLIC OF THE PHILIPPINES ENTERED INTO
SERVICE CONTRACT FOR THE EXPLORATION AND EXTRACTION OF
PETROLEUM IN NORTHWESTERN PALAWAN. THIS IS THE MALAMPAYA
NATURAL GAS PROJECT. THE PIPELINE SPANNED 504 KILOMETERS AND
CROSSED THE ORIENTAL MINDORO SEA. RESPONDENTS (JALOS, ET AL)
FILED A COMPLAINT FOR DAMAGES AGAINST SHELL BEFORE THE
RTC.RESPONDENTS CLAIMED THAT THEY WERE ALL FISHERMEN ALONG
THAT COASTAL AREA IN ORIENTAL MINDORO WHOSE LIVELIHOOD WAS
AFFECTED BY THE CONSTRUCTION AND OPERATION OF SHELLS NATURAL
GAS PIPELINE. SHELL MOVED FOR DISMISSAL OF THE COMPLAINT AND
ALLEGED THAT THE TRIAL COURT HAD NO JURISDICTION, AS IT IS A
POLLUTION CASE UNDER REPUBLIC ACT (R.A.) 3931, OR THE POLLUTION
CONTROL LAW. POLLUTION ADJUDICATION BOARD (PAB) HAS PRIMARY
JURISDICTION OVER POLLUTION CASES AND ACTIONS FOR RELATED
DAMAGES.
SHELL ALSO CLAIMED THAT IT COULD NOT BE SUED
PURSUANT TO THE DOCTRINE OF STATE IMMUNITY WITHOUT THE STATES
CONSENT. SHELL SAID THAT UNDER THE SERVICE CONTRACT, IT SERVED
MERELY AS AN AGENT OF THE PHILIPPINE GOVERNMENT IN THE
DEVELOPMENT OF THE MALAMPAYA GAS RESERVES.
ISSUE: WHETHER OR NOT THE SUIT IS ACTUALLY AGAINST THE STATE AND
IS BARRED UNDER THE DOCTRINE OF STATE IMMUNITY.
HELD: THE COURT RULED THAT SHELL IS NOT AN AGENT OF THE
PHILIPPINE GOVERNMENT, BUT A PROVIDER OF SERVICES, TECHNOLOGY
AND FINANCING FOR THE MALAMPAYA NATURAL GAS PROJECT. IT IS NOT
IMMUNE FROM SUIT AND MAY BE SUED FOR CLAIMS EVEN WITHOUT THE
STATES CONSENT.
THE RESPONDENTS HOWEVER CAN FILE THE
COMPLAINT WITH THE PAB.