Case Digest (G.R. No. 187972)
Facts:
Philippine Amusement and Gaming Corporation (PAGCOR) v. Fontana Development Corporation, G.R. No. 187972, June 29, 2010, Supreme Court First Division, Velasco Jr., J., writing for the Court.
Petitioner PAGCOR is a government-owned and controlled corporation created by Presidential Decree (PD) No. 1869 with authority to regulate and centralize games of chance and to grant franchises and licenses; Sections 8–10 of PD 1869 vest registration, regulatory powers and a 25-year franchise (renewable) in PAGCOR. On December 23, 1999 PAGCOR granted private respondent Fontana Development Corporation (FDC) (formerly RN Development Corporation) authority to operate a casino in the Clark Special Economic Zone (CSEZ) under a Memorandum of Agreement (MOA) providing that the license was non-exclusive and "co-terminus with the Charter of PAGCOR, or any extension thereof."
Subsequent administrative acts included registration amendments and multiple MOA amendments through 2004. In 2005 the Supreme Court declared Section 5 of Executive Order No. 80 (EO 80) void insofar as it purported to extend Subic incentives to Clark (in Coconut Oil Refiners Association, Inc. v. Torres). In 2007 RA No. 9487 extended PAGCOR's franchise to July 10, 2033. On July 18, 2008 PAGCOR informed FDC it would extend the MOA month-to-month pending renewal; on October 6, 2008 PAGCOR advised that its new standard Authority to Operate (SAO) would govern FDC's operations and later instructed FDC (Nov. 5, 2008) to remit fees under the SAO.
On November 5, 2008 FDC filed a complaint for injunction and specific performance in the Regional Trial Court (RTC), Manila, Branch 7 (Civil Case No. 08-120338), alleging PAGCOR breached the MOA and that the MOA automatically renewed with PAGCOR's franchise extension. PAGCOR filed a special appearance November 13, 2008, asserting the RTC lacked jurisdiction and that review should be to the Supreme Court under PAGCOR's charter and related provisions. On November 18, 2008 the RTC denied PAGCOR's motion to dismiss and granted FDC a temporary restraining order (TRO); upon bond posting the TRO issued November 19, 2008 and PAGCOR's motion for reconsideration was denied.
The RTC initially denied FDC's application for a writ of preliminary injunction on December 8, 2008, but on January 30, 2009 it reconsidered and granted a writ of preliminary injunction conditioned on posting a P100,000,000 bond; the writ was issued February 25, 2009. PAGCOR filed a petition for certiorari and prohibition with the Court of Appeals (CA) (CA-G.R. SP No. 107247) on February 5, 2009, challenging the RTC orders; the CA dismissed the petition on May 19, 2009 for lack of merit and held the initial TRO ...(Subscriber-Only)
Issues:
- Did the Manila Regional Trial Court have jurisdiction, or does exclusive jurisdiction lie with the Supreme Court, to entertain FDC's complaint for injunction and specific performance against PAGCOR?
- Was the MOA/license granted to FDC issued pursuant to PD 1869 (PAGCOR's charter) or pursuant to EO 80, Section 5 (in relation to RA 7227) such that ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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