Philippine Telegraph and Telephone Corp. vs. Smart Communications, Inc.

G.R. No. 189026
Dispute over access charges between PT&T and Smart; NTC holds primary jurisdiction, RTC improperly interfered; Supreme Court ruled NTC must resolve access charge issue first.
access charge interconnection agreement national telecommunications commission

Case Digest (G.R. No. 189026)

Facts:

Philippine Telegraph & Telephone Corp. v. Smart Communications, Inc., G.R. No. 189026, November 09, 2016, Supreme Court Third Division, Jardeleza, J., writing for the Court.

Petitioner Philippine Telegraph & Telephone Corporation (PT&T) and respondent Smart Communications, Inc. (Smart) entered into a bilateral interconnection Agreement dated June 23, 1997, providing for interconnection of Smart’s CMTS, LEC and paging services with PT&T’s LEC service. The Agreement set specific access-charge rates and, following PT&T’s payment difficulties, the parties amended the Agreement on November 28, 2003 to change payment terms and to adjust access-charge rates contingent on PT&T’s outstanding balance.

On April 4, 2005 Smart notified PT&T that it would raise its access charge to PT&T from P1.00 to P2.00 effective April 1, 2005 pursuant to the amendment. PT&T protested on September 2, 2005, claiming Smart had overcharged outbound calls and demanded a refund of P12,681,795.13, invoking an NTC resolution in a separate Smart–Digitel dispute as support. PT&T filed a letter-complaint with the National Telecommunications Commission (NTC) on September 15, 2005. The NTC conducted mediation (order of January 20, 2006), and after mediation failed, directed the parties to file pleadings for adjudication.

Before the parties completed the NTC pleadings, on April 7, 2006 Smart sued PT&T in the Regional Trial Court (RTC), Makati City, Branch 146, seeking enforcement of the amended Agreement and recovery of P1,387,742.33; it also sought injunctive relief to bar the NTC and PT&T from acts inconsistent with the Agreement. The RTC granted a temporary restraining order on April 25, 2006 and later issued a writ of preliminary injunction in favor of Smart, holding that the RTC had jurisdiction over the contractual dispute and that the NTC had no authority to adjudicate breaches of contract or award damages.

PT&T filed a petition for certiorari with the Court of Appeals, contending the RTC committed grave abuse of discretion and improperly restrained the NTC. The Court of Appeals denied relief (Decision dated February 18, 2009 and Resolution dated July 23, 2009 in CA-G.R. SP No. 97737), finding the RTC had jurisdiction to entertain Smart’s action for specific performance. PT&T elevated the case to the Supreme Court by a pet...(Pro-only)

Issues:

  • Whether the NTC has primary/quasi-judicial jurisdiction under RA 7925, Sec. 18 to approve, adopt, or review access-charge arrangements stipulated in a bilateral interconnection agreement between public telecommunication entities.
  • Whether the RTC properly issued a writ of preliminary injunction restraining the NTC from proceeding with its administrative determination of the access charges, or whether the injunction constituted unlawful interference with a tribunal of ...(Pro-only)

Ruling:

  • (Pro-only)

Ratio:

  • (Pro-only)

Doctrine:

  • (Pro-only)
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