G.R. No. 200474 - Awayan vs. Sulu Resources Development Corp.

On April 7, 1998, the Republic of the Philippines entered into a Mineral Production Sharing Agreement (MPSA No. 108-98A-IV) with Sulu Resources Development Corporation (later Holcim Aggregates Corporation, then Holcim Mining and Development Corporation) for the exploration and utilization of minerals over a 775.1659-hectare area in Barangay Cupang, Antipolo, Rizal for 25 years, renewable for another 25 years.
The Agreement required Sulu Resources to submit quarterly and annual reports and a Declaration of Mining Project Feasibility within certain periods during the Exploration Phase.

Sulu Resources submitted reports from July 1998 to June 2000 but declared in April and August 2002 it could no longer submit required reports and the Declaration of Mining Project Feasibility due to "force majeure" circumstances.
The Mines and Geosciences Bureau (MGB) conducted a field investigation in October 2002, finding that armed roadblocks controlled by Armando Carpio prevented Sulu Resources’ entry, with unresolved surface ownership disputes.
The MGB concluded Sulu Resources’ failure to comply was justified under force majeure as per Section 3(s) of Republic Act No. 7942 and recommended arbitration to determine compensation and establishment of escrow deposits pending resolution.

Environment Secretary Elisea Gozun (2003) found no violation by Sulu Resources and its proper performance under the Agreement.
Successor Environment Secretary Michael T. Defensor (2005) ordered that the Agreement was not among canceled mining agreements due to violations or non-performance.
MGB technical personnel reported in 2006 that Sulu Resources’ failure to submit reports was justified by force majeure owing to disputes with surface owners.
Sulu Resources submitted a "geological confirmation data gathering activities" report in 2008 and a Quarterly Report in 2009 detailing survey and exploration activities; it also secured an Environmental Compliance Certificate.

Maximo Awayan, a surface owner in the contract area, filed a petition before the DENR on February 16, 2009, seeking cancellation of the Agreement alleging non-operation, illegal inclusion of his property, failure to submit required reports and feasibility declarations, overextension of the Exploration Period, and lack of financial qualifications by Sulu Resources.
On September 19, 2009, Environment Secretary Jose L. Atienza granted the petition, citing Sulu Resources’ failure to renew the exploration period, submit required reports, and file Declaration of Mining Project Feasibility, thereby violating the Agreement and grounds for cancellation under the Mining Act and the Agreement.
Sulu Resources’ motions for reconsideration were denied, and the contract area was declared open for new mining applications.

Sulu Resources appealed before the Office of the President, asserting excuse by force majeure, substantial compliance, and policy-based errors in cancellation. The Office of the President affirmed the cancellation in a March 5, 2010 Decision.
Sulu Resources filed for reconsideration, which was denied, then brought the case to the Court of Appeals (CA).
The CA, in an August 16, 2011 Decision, reversed the DENR and Office of the President orders, holding that force majeure justified Sulu Resources’ partial noncompliance, and that cancellation was issued without MGB Director’s recommendation as required under Administrative Order No. 96-42, Section 7(e). Thus, cancellation was void.
The CA upheld that the MGB Director’s recommendation is a mandatory prerequisite for cancellation.
Maximo Awayan’s motion for reconsideration before the CA was denied.
Awayan then filed a Petition for Review on Certiorari before the Supreme Court.

He has legal standing as a real party in interest given his ownership and direct injury from the Agreement.
The Court of Appeals erred in resolving questions of fact in a Rule 45 petition.
The Environment Secretary can cancel the Agreement without MGB recommendation; Section 7(e) of Administrative Order No. 96-40 permits but does not restrict the Secretary’s authority.
The force majeure claim is invalid as disputes with surface owners are not beyond Sulu Resources’ control; remedies under RA 7942 Sections 75 and 76 were available and unused.
Non-compliance constitutes a substantial breach justifying cancellation.
Prior findings of force majeure and approvals by former Secretaries do not estop the current Secretary from cancellation.

Petitioner lacks legal standing, being only one of many surface owners without direct injury or substantial interest.
The Petition raises factual issues inappropriate for Rule 45 except under recognized exceptions which do not apply.
Cancellation order lacks basis and was issued without MGB recommendation, constituting grave abuse of discretion.
The force majeure defense is valid due to armed blockade and disputed ownership limiting access, recognized uniformly by the MGB and previous Secretaries.
Remedies under RA 7942 are impractical or inadequate for the present dispute.
Period extension under the Agreement applies automatically due to force majeure.
Cancellation would waste progress made and harm the public interest.
The government is estopped by prior administrative findings validating Sulu Resources’ compliance.

Whether questions of fact may be resolved by the Supreme Court in this Rule 45 Petition for Review on Certiorari.

Whether petitioner, Maximo Awayan, has legal standing to file the petition attacking the MPSA.

Whether the Court of Appeals erred in annulling the cancellation of the Agreement considering:

Whether the Mines and Geosciences Bureau Director’s recommendation is necessary before the Environment Secretary can cancel a mineral agreement.
Whether Secretary Atienza gravely abused his discretion in ordering the cancellation of the Agreement.
Whether the prior findings and declarations of former Secretaries bind the current Secretary or estop the government from cancellation.