G.R. No. 37878 - Manila Electric Co. vs. Pasay Trans. Co., Inc.

The Manila Electric Company (Meralco) petitioned the Supreme Court, sitting as a board of arbitrators, under Section 11 of Act No. 1446 to:

Fix the terms upon which certain transportation companies could use the Pasig bridge owned by Meralco.
Determine the compensation to be paid by those transportation companies to Meralco for such use.

Act No. 1446 is an act granting a franchise to Charles M. Swift (and by succession to Meralco) to build and operate an electric railway and power system from Manila to Pasig.

Section 11 of the Act provides that if any other person or corporation is granted a franchise or right of way over portions of the grantee’s lines and tracks, the terms of use and compensation shall be fixed by the members of the Supreme Court, sitting as a board of arbitrators, whose decision shall be final.

The Supreme Court ordered Meralco to serve copies to the Attorney-General and affected transportation companies.
The Attorney-General disclaimed interest in the proceedings.
Opposition was filed by several public utility operators.
Oral hearings were conducted, and memoranda submitted for resolution.

The Supreme Court examined the validity and scope of section 11 of Act No. 1446, focusing on:

Whether members of the Supreme Court, sitting as a board of arbitrators, have the legal right to act on the petition.
The finality of the arbitrators’ decision.
The nature of arbitration and how it interacts with the courts’ jurisdiction.
Precedents regarding arbitration agreements that exclude court jurisdiction.

The distinction between the Supreme Court as a judicial body and the members of the Supreme Court acting as a board of arbitrators.
The constitutional and organic limitations on the powers of the Supreme Court and its members.
The incompatibility of granting a quasi-legislative or administrative function to justices acting outside their judicial capacity.
The potential conflict of interest and procedural anomaly of the Supreme Court reviewing decisions made by its own members acting as arbitrators.

Whether Section 11 of Act No. 1446 is valid in granting the members of the Supreme Court, sitting as a board of arbitrators, the authority to fix terms and compensation for the use of a right of way over lines and tracks of the original grantee.

Whether the members of the Supreme Court, acting as a board of arbitrators, have the legal right and jurisdiction to act on the petition of the Manila Electric Company.

Whether the arbitration decision of the majority of the members of the Supreme Court, sitting as such board, being final, can oust the courts of jurisdiction and be consistent with constitutional and organic law provisions.