G.R. No. 157498 - Filipino Metals Corp. vs. Secretary of the Department of Trade and Industry

Filipino Metals Corporation, Maxima Steel Mills Corporation, Builders Steel Corporation, Unicorn Metal Corporation, Venus Steel Corporation, Legacy Steel Corporation, Pag-asa Steel Corporation, Martian (also referred to as Martial) Steel Corporation, Lunar (also referred to as Lunas) Steel Corporation, Cebu Steel Corporation, Capitol Steel Corporation, Steel Asia Manufacturing Corporation, and Grand Asia Corporation.
They are manufacturers of various steel products, including reinforcing bars, steel sections, and profiles.

The main raw material is steel billets, sourced partly from domestic suppliers and partly from overseas.
Only about 15% of the raw material requirements are met by domestic producers, whose products are of inferior quality due to the use of scraps with impurities, as opposed to the imported products made from virgin-ore materials.
Due to these quality concerns, petitioners are compelled to import the bulk of their raw materials.

Enacted on July 17, 2000, it codified provisions of Article XIX of the GATT and the WTO Agreement on Safeguards.
It authorizes the imposition of safeguard measures if imports of a product are so voluminous as to cause or threaten serious injury to domestic producers of like or directly competitive products.
The legislation delegates the power to fix tariff rates and related duties to the executive (specifically, the Secretary of the Department of Trade and Industry).

On April 6, 2001, petitioners filed a petition for declaratory relief and/or certiorari and prohibition challenging the constitutionality of Rep. Act No. 8800.
The RTC of Valenzuela City, Branch 172, in Civil Case No. 82-V-01, while postponing a determination on the constitutional issue, granted a writ of preliminary injunction against the enforcement of the law, after the posting of a bond for P10,000,000.00.

Respondents filed a petition for certiorari arguing that the RTC had acted with grave abuse of discretion in issuing the injunction.
In its decision dated February 28, 2003, the Court of Appeals set aside the RTC’s order, emphasizing the presumption of constitutional validity of laws and alleging that the projected injury by respondents did not amount to the clear, immediate harm warranting the injunctive relief.

Petitioners alleged the unconstitutionality of Rep. Act No. 8800 on several grounds, including:

Violation of Article VI, Section 28(2) of the Constitution, contending that Congress improperly delegated the power to impose tariffs and related duties.
Impairment of Philippine treaty obligations under the WTO Agreement on Safeguards.
A clear demonstration of irreparable injury, as safeguard measures would force them to shut down operations and lay off employees.
Accusations of forum-shopping by respondents.

The law enjoys a strong presumption of constitutionality.
The delegation of power in Rep. Act No. 8800 was valid.
The alleged injuries were neither grave nor irreparable, and that the issue of WTO compliance was not appropriately raised at the appellate level.

The primary purpose of safeguard measures is to protect domestic industry from import surges, not to generate revenue.
The issuance of safeguard measures may take the form of quantitative restrictions rather than a tariff increase.

Reference was made to cases (such as Southern Cross Cement Corporation v. Philippine Cement Manufacturers Corporation and Churchill and Tait v. Rafferty) to distinguish safeguard measures from internal revenue taxes, which are in the lifeblood of the national economy.
The background legal framework under Rule 58, Section 3 of the Revised Rules of Court was cited, emphasizing the standards for granting a preliminary injunction.

Whether the Court of Appeals committed reversible error by reversing the RTC’s order that issued a preliminary injunction restraining the enforcement of Rep. Act No. 8800.
Whether petitioners sufficiently established a strong case of unconstitutionality that could overcome the presumption of constitutional validity attached to Rep. Act No. 8800, particularly concerning the delegation of power over tariff and duty imposition.
Whether petitioners have adequately demonstrated a clear legal right to injunctive relief, given the potential for grave and irreparable harm due to the application of safeguard measures.
Whether the alleged violation of the WTO Agreement on Safeguards was properly raised as a ground for unconstitutionality at the trial court level.
Whether the issue of forum‑shopping, as alleged against respondents, is determinative of the case or merely ancillary to the substantive issue of the injunction’s propriety.