G.R. No. 163101 - Benguet Corporation vs. Department of Environment and Natural Resources

On June 1, 1987, Benguet Corporation (Benguet) and J.G. Realty and Mining Corporation (J.G. Realty) entered into a Royalty Agreement with Option to Purchase (RAWOP) concerning four mining claims named Bonito-I to Bonito-IV in Jose Panganiban, Camarines Norte, totaling 288.8656 hectares.
The parties also executed a Supplemental Agreement on the same date.

J.G. Realty was acknowledged as owner of the claims; Benguet was to perfect the mining rights or acquire them and to conduct examination and exploration within 24 months to determine if development was commercially viable.
Benguet was to submit a report after examination and could send written notice to develop the claims before the expiration of the examination period, followed by placing the claims into commercial production within 24 months from such notice.
J.G. Realty was to receive a 5% royalty of net realizable value from production, including during examination and development stages.

On August 9, 1989, Benguet informed J.G. Realty of its intention to develop the claims.
On February 9, 1999, J.G. Realty terminated the RAWOP citing Benguet’s failure to comply with obligations: failure to develop within 2 years, allowing high graders, no term limit stipulated, and non-payment of royalties.
Benguet replied on March 8, 1999, alleging compliance by investing Php 42.4 million, citing force majeure due to non-issuance of a Mines Temporary Permit by the Mines and Geosciences Bureau (MGB), claiming high graders operated prior to Benguet’s involvement, and explaining the royalty payment issue as refusal by J.G. Realty to collect checks.

On June 7, 2000, J.G. Realty filed a Petition for Declaration of Nullity/Cancellation of the RAWOP before the MAB Panel of Arbitrators (POA).
The POA, on March 19, 2001, declared the RAWOP canceled and excluded Benguet from the joint Mineral Production Sharing Agreement (MPSA) application over the mining claims.
Benguet appealed to the Department of Environment and Natural Resources-Mining Adjudication Board (DENR-MAB), which affirmed POA’s decision on December 2, 2002, and denied Benguet’s Motion for Reconsideration on March 17, 2004.
Benguet then filed a petition under Rule 65 seeking annulment of these decisions with the Supreme Court.

Whether the parties were obliged to submit the dispute first to voluntary arbitration under the RAWOP before POA took cognizance of the case.
Whether the DENR-MAB exceeded its jurisdiction by canceling the RAWOP despite lack of evidence.

Whether the cancellation of the RAWOP was supported by substantial evidence.
Whether such cancellation caused unjust enrichment to J.G. Realty at the expense of Benguet.