G.R. No. 201284 - Luvimin Cebu Mining Corp. vs. Cebu Port Authority

Case Digest (G.R. No. 201284)
Expanded Legal Reasoning Model

Facts:

Background and Authorization

On October 28, 1997, the Cebu Port Authority (CPA) issued a Certificate of Registration and Permit to Operate to petitioners Luvimin Cebu Mining Corp. and Luvimin Port Services Company, Inc., authorizing them to operate a private port facility at Barangay Talo-ot, Argao, Cebu until December 31, 2022.
The permit was issued despite the petitioners having reclaimed a parcel of land in Barangay Talo-ot as early as 1985, on which they constructed a roll-on-roll-off (RORO) wharf facility to serve as a low-cost alternative for cargo handling and transport.

Grounds for Rescission of Permit

On March 1, 2006, CPA rescinded the petitioners’ permit on three primary grounds:

The requirement that a Foreshore Lease Agreement (FLA) is a prerequisite for the approval of a port license, while the petitioners’ corresponding FLA was still pending with the Department of Environment and Natural Resources (DENR).
The petitioner’s FLA was denied by the DENR on November 4, 1999 because the area was deemed unsuitable for a foreshore lease and should instead be subjected to an Other Lawful Purposes (OLP) permit.
Despite filing an application for OLP in 2000, no subsequent permit had been granted.

Based on these grounds, the CPA declared the registration/permit defective, immediately took possession of the port facility, and began fencing the premises.

Petitioners’ Relief and Claims

In response to the unilateral rescission by CPA, petitioners filed a complaint for injunction and damages with the RTC seeking:

A Temporary Restraining Order (TRO) and/or a Writ of Preliminary Injunction to prohibit CPA and its officials—including Port Manager Angelo Verdan—from taking over the port facility.
Damages for what they alleged was a denial of their right to due process.

Petitioners emphasized their clear right to operate the facility, pointing to various favorable endorsements from local government officials and environmental agencies, such as:

Endorsements by the Barangay Captain of Talo-ot and the Sangguniang Bayan of Argao.
Support from the Office of the Provincial Planning, the Undersecretary of the Department of Tourism, and an Environmental Compliance Certificate from the DENR in Region VII.

Developments at the Port and Injunction Proceedings

Following the rescission of their permit, CPA proceeded to assert control over the facility:

In June 2006, CPA and its Port Manager constructed a Field Office within the wharf without notifying the petitioners.
By August 2007, the CPA was nearly finished fencing both the wharf and the adjacent ramp leading to the sea.

On August 31, 2007, the RTC issued an Order granting a Temporary Restraining Order for 20 days and scheduled a hearing for a preliminary injunction application.
In a subsequent Order dated February 19, 2008, the RTC issued a Writ of Preliminary Injunction:

The Order enjoined CPA, Verdan, and others from taking over the facility’s premises further.
It required petitioners to post a bond of ₱2,000,000.00 and set a pre-trial conference on March 27, 2008.

Opposition and Counterarguments by Respondents

CPA and its representatives argued against the petitioners’ claims, stating:

The Talo-ot Port formed part of a national infrastructure project under the Nautical Highway initiative, thereby invoking special statutory protections under Republic Act (R.A.) No. 8975.
The petitioners’ application for legal relief was moot since CPA had already taken over the facility and was implementing various infrastructure projects (e.g., repairing the RORO ramp, asphalting, and constructing new structures).

Additional arguments by respondents included:

The issue was beyond the territorial jurisdiction of the RTC of Cebu City.
The petitioners had not secured a tenurial instrument from the DENR and had committed forum-shopping by initiating the suit with the RTC while administrative remedies remained pending.

Subsequent Judicial Proceedings

In an RTC Order dated February 19, 2008, the writ of preliminary injunction was granted on grounds including:

The CPA’s takeover without proper notification or transference violated the petitioners’ due process rights and property interests (even if only a privilege to operate).
The principle of administrative remedies was set aside due to the urgency of preventing grave injustice and irreparable injury.

After the respondents sought reconsideration—which was denied in an RTC Order dated August 27, 2008—the case escalated to the Court of Appeals (CA).
On October 19, 2011, the CA reversed the RTC’s decision:

It held that the remedies sought by the petitioners were barred by R.A. No. 8975, which prohibits lower courts from issuing restraining orders against national government projects.
It ruled that any resulting loss was compensable by damages rather than enjoinable through a writ.

The CA reiterated its judgment in a Resolution dated March 14, 2012 denying the petitioners’ motion for reconsideration.

Statutory Interpretation and Contractual Provisions

The case involved the analysis of key statutory provisions, particularly:

Section 3 and Section 4 of R.A. No. 8975, which explicitly prohibit the issuance of temporary restraining orders, preliminary injunctions, or mandatory injunctions against national government projects, except in matters of extreme urgency involving constitutional issues.
Relevant provisions of R.A. No. 6957, as amended by R.A. No. 7718, pertaining to private sector involvement in national infrastructure projects.

The Certificate of Registration and Permit to Operate issued to the petitioners contained a clause stating that, upon expiration, the facility would revert to CPA without any obligation of reimbursement, reinforcing that the permit was a mere privilege rather than a vested property right.

Final Outcome

Ultimately, the Supreme Court denied the petitioners’ appeal, affirming the CA’s decision and holding that:

The RTC had gravely abused its discretion by issuing the writ of preliminary injunction contrary to R.A. No. 8975.
The petitioners had no vested property right in the Talo-ot Port, only a conditional privilege subject to revocation.
The acts of CPA fell within the ambit of a national government project, and judicial intervention through an injunction was precluded by the law.

Issues:

Whether the unilateral rescission of the petitioners’ registration/permit by the CPA violated their due process rights.

Did the lack of prior notice and opportunity to comply with permit conditions amount to a constitutional violation?
Whether the petitioners’ claim of being deprived of a vested property right is sustainable given the contractual nature of the permit.

The validity of the RTC’s issuance of a Temporary Restraining Order and subsequent Writ of Preliminary Injunction.

Can a lower court enjoin actions related to a national government project under the provisions of R.A. No. 8975?
Whether the exceptions provided in R.A. No. 8975 for extreme urgency involving constitutional issues apply in this case.

The applicability of statutory provisions concerning national infrastructure projects.

Whether Talo-ot Port qualifies as a national government project under R.A. No. 6957 (as amended by R.A. No. 7718).
Whether the prohibition against issuing injunctive relief, as mandated by Sections 3 and 4 of R.A. No. 8975, should preclude any judicial intervention.

The determination of appropriate remedies.

Whether any loss suffered by petitioners due to the revocation of their permit is compensable solely by damages rather than an injunction.

Ruling:

(Subscriber-Only)

Ratio:

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Case Digest (G.R. No. 201284) Core Legal Reasoning Model Expanded

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Case Digest (G.R. No. 201284) Expanded Legal Reasoning Model

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Case Digest (G.R. No. 201284)
Core Legal Reasoning Model

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Case Digest (G.R. No. 201284)
Expanded Legal Reasoning Model