By Joel R. San Juan
THE Supreme Court (SC) has nullified a Court of Appeals (CA) ruling which affirmed the decision of President Aquino to revoke the alleged midnight deal between the Arroyo administration and a Canadian mining firm and its local partners involving large-scale exploration, development and utilization of minerals in the municipalities of Rizal, Bataraz and Narra in Palawan.
In a 16-page decision penned by Associate Justice Estela Perlas-Bernabe, the SC’s First Division granted the petition filed by local mining firms Narra Nickel Mining and Development Corp., Tesoro Mining and Development and McArthur Mining Inc. seeking to invalidate the CA ruling issued on February 23, 2012.
The High Court held that the appellate court has no jurisdiction over the issue, thus, its decision should be declared null and void.
“The Court finds that the CA improperly took cognizance of the case on appeal…for the reason that the OP’s [Office of the President] cancellation and/or revocation of the FTAA [Financial or Technical Assistance Agreement] was not one which could be classified as an exercise of its quasi-judicial authority, thus negating the CA’s jurisdiction over the case,” the SC said..
It pointed out that quasi-judicial or administrative adjudicatory power is the power of the administrative agency to adjudicate the rights of persons before it.
The Court added that the administrative body exercises quasi-judicial powers when it performs in a judicial manner an act which is essentially executive or administrative in nature, where the power to act in such manner is incidental to or reasonably necessary for the performance of the executive or administrative duty entrusted to it.
It further explained that the OP’s cancellation and/or revocation of the FTAA is not an adjudication as it cannot be likened to the judicial function of a court of justice, or even a quasi-judicial agency or office.
It noted that the OP was exercising an administrative function pursuant to the President’s authority to invoke the Republic’s right.
It added as one of the contracting parties, the OP could not have adjudicated in which it is an interested party, as in a court where rights and duties of parties are settled before an impartial tribunal.
“Thus, at least with respect to cases affecting an FTAA’s validity, the court holds that the OP has no quasi-judicial power to adjudicate the priority of its cancellation/revocation,” the Court ruled.
“To reiterate, being a government or public contract, the FTAA is subject to fundamental contract principles, one of which is the principle of mutuality of contracts which would definitely be violated if one were to accept the view that the OP, a contracting party, can adjudicate on the contract’s own validity,” the SC said.
On February 23, 2012, the CA held that petitioners Narra Nickel Mining and Development Corp., Tesoro Mining and Development and McArthur Mining Inc. failed to substantiate its claim that the OP committed grave abuse of discretion in ordering the revocation of the mining firms’ FTAA on April 6, 2011, and denying their motion for reconsideration (MR) in a resolution issued on July 6, 2011.
President Aquino canceled the mining firms’ FTAA based on the complaint filed by another mining firm, Redmont Consolidated Mining Corp., which alleged that the recommendation and approval of the FTAA in favor of the petitioners were done with grave abuse of discretion.
Redmont claimed that there were violations of the mining law, its rules and regulations, as well as other
applicable laws connected with the conversion of petitioners’ mineral production and sharing agreement (MPSA) and exploration permit applications filed in 1991 and 2001, respectively, to FTAA applications in 2007.
The appellate court also did not give weight to the argument of the petitioners that the FTAA can no longer be canceled since it had already been approved by former President and now Pampanga Rep. Gloria Macapagal-Arroyo.
The petitioners stressed that the OP cannot cancel their FTAA being one of the contracting parties.
But, the CA noted that under Section 17.2 of the FTAA, it was clearly expressed that the same may be canceled by either party if there was violation of its terms and conditions, failure of the contractor to pay taxes and fees.
Based on the records, the FTAA was approved in favor of MBMI Resources, a Canadian mining firm and its local partners covering four properties in the municipalities of Rizal, Bataraz and Narra, all in Palawan, on April 5, 2010.
Meanwhile, Redmont, who also has an application of mining exploration permit, filed a petition for cancellation/revocation of FTAA before the OP citing violations of the mining law committed by the petitioners.
On April 6, 2011, the President ruled in favor of Redmont, prompting the petitioners to elevate the case before the CA.