Case Digest (G.R. No. 201715)
Facts:
Republic of the Philippines v. Manila Electric Company (Meralco) and National Power Corporation (NPC), G.R. No. 201715, December 11, 2013, First Division, Bersamin, J., writing for the Court.
The petition arose from Special Civil Action No. 3392 filed in the Regional Trial Court (RTC), Branch 71, Pasig City, an action for declaratory relief entitled Manila Electric Company v. National Power Corporation, et al. The Office of the Solicitor General (OSG), representing the Republic, sought certiorari, prohibition and mandamus relief in the Court of Appeals (CA) after the RTC denied motions to dismiss or stay the RTC action and refused to refer the parties to arbitration; the CA dismissed the OSG’s petitions and ordered the RTC to proceed to trial. The OSG then brought the matter to the Supreme Court via a petition for review on certiorari.
The underlying commercial dispute began with a Contract for the Sale of Electricity (CSE) dated November 21, 1994 under which NPC supplied and MERALCO purchased minimum volumes of energy through 2004, including minimum monthly charges even if actual off-take was lower. Due to circumstances beyond the parties’ control, MERALCO under-drew in 2002–2004 and refused to pay minimum charges for those months. After contentious claims and counterclaims (including MERALCO’s asserted losses from delayed transmission facilities and unauthorized direct-supply to customers), the parties submitted to mediation, which produced on July 15, 2003 a Settlement Agreement resolving amounts and providing a pass-through mechanism conditioned on Energy Regulatory Commission (ERC) approval.
MERALCO and NPC jointly filed with the ERC on April 15, 2004 a petition to approve the pass-through and for provisional authority; hearings ran through October 7, 2005 and the matter was submitted on July 10, 2006. In May 2008 the OSG moved to intervene in the ERC proceedings and opposed the Settlement, prompting the ERC to suspend action. MERALCO then filed S.C.A. No. 3392 in the RTC on November 23, 2009 to obtain a declaratory judgment on the Settlement’s validity and related reliefs.
The OSG repeatedly moved in the RTC to stay or dismiss S.C.A. No. 3392 and to compel arbitration under the arbitration clause of the CSE; the RTC denied those motions on November 3, 2010, and later proceeded with a pre-trial that, after procedural skirmishes and the OSG’s partial nonparticipation, resulted in the RTC deeming the OSG to have waived its right to participate and present evidence on November 24, 2010. The OSG brought a special civil action for certiorari, prohibition and mandamus in the CA (C.A.-G.R. SP No. 116863) and obtained a TRO (Dec. 1, 2010) and later a writ of preliminary injunction (Feb. 3, 2011) enjoining the RTC from further proceedings during the pendency of the CA petition. On October 14, 2011 the CA denied the petition and ordered the RTC to proceed with trial; the CA denied reconsideration on April 25, 2012.
Meanwhile the RTC ultimately rendered a decision on the merits in S.C.A. ...(Pro-only)
Issues:
- Is the Supreme Court petition moot and academic by reason of the RTC’s intervening decision on the merits?
- Did the RTC commit grave abuse of discretion in (a) denying the OSG’s motions to dismiss or stay and to refer the parties to arbitration, and (b) deeming the OSG to have waived its right to participate in pre-trial and to present evidence?
- Should the Supreme Court order MERALCO and NPC to resolve their dispute by arbitration pursuant to the arbitration clause of the CSE?
- Is the validity of the Settlement Agreement a prop...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)