G.R. No. 205986 - GMA Network, Inc. vs. ABC Development Corp.

In 2004, Citynet Network Marketing and Productions, Inc. (“Citynet”) entered into a Co-Production/Blocktime Agreement with Zoe Broadcasting Network, Inc., later assigned to GMA Network, Inc. (“GMA”), which reformatted ZOE Channel 11 into QTV-11 and provided programming.
QTV-11 launched in November 2005 and quickly gained market share in Mega Manila, ranking third in viewership in its first two months.

In 2008, reports from Merrill Lynch of Singapore and Philippine newspapers disclosed that ABC Development Corporation (“ABC-5”) had sold nearly all its airtime to MPB Primedia, Inc. (“Primedia”), a Philippine corporation allegedly 70% owned by Malaysian Media Prima Berhad (“MPB”).
Primedia was said to manage and supply content for TV-5, controlling approximately 93.75% of its airtime, resulting in a rapid rise in ABC-5’s ratings to third place, displacing competitor stations.

On December 3, 2008, GMA, Citynet, and Zoe Broadcasting filed a complaint before the Regional Trial Court (Quezon City) to nullify the ABC-5/Primedia Blocktime Agreement and claim damages for unfair competition, alleging violations of:

Article XVI, Section 11(1) of the 1987 Constitution (mass media ownership limited to Filipinos).
The Anti-Dummy Law (Commonwealth Act 108, as amended).
Civil Code Article 1409 (contracts void ab initio if contrary to law).

Defendants moved to dismiss on grounds of lack of jurisdiction, failure to exhaust administrative remedies before the National Telecommunications Commission (“NTC”), improper service, and non-compliance with certification against forum shopping.
On April 2, 2009, the trial court ordered plaintiffs to file an amended complaint and denied a motion to produce the Blocktime Agreement.
Plaintiffs filed the amended complaint; ABC-5 and Primedia renewed motions to dismiss and to strike, citing exhaustion of remedies, false forum-shopping certification, and the need for quo warranto proceedings.

On December 15, 2009, the trial court dismissed the amended complaint without prejudice and with finality, holding that:

The NTC had primary jurisdiction to examine technical and factual aspects of the Blocktime Agreement and to regulate unfair competition among broadcasters.
Plaintiffs had violated the certification against forum shopping by not disclosing a withdrawn letter-complaint filed with the NTC.
Challenges to ABC-5’s franchise and Primedia’s corporate status belonged in quo warranto proceedings before the Office of the Solicitor General.

GMA and Citynet appealed to the Court of Appeals, which on October 16, 2012 affirmed the dismissal for failure to exhaust administrative remedies and violation of forum-shopping rules. A motion for reconsideration was denied on February 21, 2013.

GMA and Citynet filed a Petition for Review on Certiorari before the Supreme Court, arguing that:

The Regional Trial Court had exclusive jurisdiction over their civil action to declare the Blocktime Agreement void.
The primary jurisdiction doctrine and exhaustion rule did not apply to questions of constitutionality and Anti-Dummy Law violations.
Their amended complaint was exempted from certification against forum shopping since the letter-complaint was withdrawn prior to court filing.

Respondents ABC-5, Primedia, and Media Prima Berhad opposed, reasserting NTC’s primary jurisdiction, plaintiffs’ non-compliance with forum-shopping rules, and the improperly pleaded qui tam nature of the suit.

Whether the issue of unfair competition and alleged contract invalidity must be referred first to the NTC under the doctrine of primary administrative jurisdiction.
Whether the Regional Trial Court has subject-matter jurisdiction over a civil action to annul a blocktime agreement for constitutional and statutory violations.
Whether petitioners complied with the certification-against-forum-shopping requirement under Rule 7, Section 5 of the Rules of Court.
Whether the action filed is effectively a quo warranto proceeding improperly instituted by private parties.