G.R. No. 178552 - Southern Hemisphere Engagement Network, Inc. vs. Anti-Terrorism Council

The case involves the application of Administrative Circular No. 04-94, which was issued to prevent the practice of forum-shopping by requiring a certificate of non-forum shopping in initiatory pleadings.
The primary issue centers on whether a compulsory counterclaim filed in an answer must be accompanied by such a certification, and if its dismissal due to the absence of the certificate is with prejudice, thereby barring its re-filing.

On June 13, 1995, private respondents Ildefonso and Leonora Clamosa filed a complaint for a sum of money and damages before the Regional Trial Court of Trece Martires City, Branch 23, alleging unpaid costs incurred for repairing petitioners’ house in San Roque, Cavite (Civil Case No. TM-601).
Petitioners filed a motion to dismiss the complaint for failure to state a cause of action, which was denied by the trial court on September 21, 1995.

On October 18, 1995, petitioners submitted their answer along with a compulsory counterclaim.
In their counterclaim, petitioners asserted the following:

Consequently, petitioners claimed entitlement to ₱250,000 for the completion of the renovation, as well as damages.

On August 23, 1996, the trial court ordered the compulsory counterclaim to be stricken from the record on the ground that it did not comply with Administrative Circular No. 04-94, which mandates an affidavit or certification of non-forum shopping for all initiatory pleadings.
Petitioners filed a motion for reconsideration on September 17, 1996, contending that the counterclaim, being compulsory in nature, does not qualify as an initiatory pleading subject to the requirements of the circular.
The trial court denied the motion for reconsideration on October 17, 1996.

Petitioners questioned the trial court’s ruling by initiating a special civil action for certiorari under Rule 65 (G.R. No. 127701).
The Second Division of the Court, on February 10, 1997, dismissed the petition for lack of merit, holding that strict compliance with the administrative circular was necessary for all initiatory pleadings.
Petitioners then filed an "Answer with Amended Compulsory Counterclaim" which included an affidavit of non-forum shopping.

Initially, this amended counterclaim was admitted by the trial court on July 9, 1997.
After a motion for reconsideration by the respondents, the trial court later expunged the amended counterclaim from the record, as reflected in its Order dated December 9, 1997.

Following a subsequent motion for reconsideration denied on March 17, 1998, petitioners filed the present special civil action for certiorari challenging the trial court orders.

Administrative Circular No. 04-94, effective April 1, 1994, was intended to prevent forum-shopping—a practice wherein a party seeks to obtain a favorable ruling in a different forum after an adverse judgment.
The circular requires that initiatory pleadings (e.g., original complaint, counterclaim, cross-claim) be accompanied by a certification under oath affirming non-forum shopping.
Notably, in the earlier case of Santo Tomas University Hospital v. Surla, the Court ruled that the certificate requirement does not apply to compulsory counterclaims, because these are auxiliary to the main claim.

Whether a compulsory counterclaim filed in an answer must be accompanied by a certificate of non-forum shopping as mandated by Administrative Circular No. 04-94.
Whether the dismissal of a compulsory counterclaim for the absence of this certification constitutes a dismissal with prejudice, thereby barring the party from re-filing the counterclaim.
Whether the regulatory scope of the administrative circular, which targets initiatory pleadings, extends to compulsory counterclaims that are inherently connected to and dependent on the main complaint.
Whether the trial court correctly applied the administrative circular’s requirement in striking out an ancillary plea that is compulsory by nature.