The Supreme Court held that pursuant to Section 21 of Republic Act No. 7227, only the Supreme Court has the jurisdiction to issue a restraining order or preliminary injunction against the implementation of projects for the conversion of former military reservations into alternative productive uses, which includes the operations of duly registered enterprises within the Clark Special Economic Zone like respondent Clark Liberty.

Petitioner ADPI held an exclusive distributorship agreement for "Fundador" brandy in the Philippines, granted by the Spanish manufacturer Pedro Domecq, S.A. ADPI obtained the necessary Certificate of Registration from the Bureau of Food and Drugs (BFAD) for the product. Subsequently, the Bureau of Customs issued a circular requiring importers of "Fundador" brandy to present a valid BFAD certificate. Respondent Clark Liberty, a duty-free shop in the Clark Special Economic Zone (CSEZ), imported a significant quantity of "Fundador" brandy without such a certificate.

• Petitioner ADPI had an exclusive distributorship agreement with Pedro Domecq, S.A. of Spain to import and distribute "Fundador" brandy in the Philippines, effective May 8, 1996, and automatically extended indefinitely.
• ADPI registered the product with the BFAD as required by regulations for imported food products.
• At ADPI's request, BFAD informed the Bureau of Customs (BOC) that "Fundador" brandy imports should require a valid BFAD Certificate of Registration.
• The BOC issued Customs Memorandum Circular No. 228-098 implementing BFAD's request.
• On April 12, 1999, respondent Clark Liberty, a licensed duty-free shop in the Clark Special Economic Zone (CSEZ), imported 9,420 bottles of "Fundador" brandy.
• Since the importation lacked the BFAD certificate, the BOC seized the shipment under S.I. No. 99-140, pursuant to CMC No. 228-98 and the Tariff and Customs Code.
• ADPI attempted to intervene in the seizure proceedings, claiming damages from the alleged illegal importation, but the District Collector did not resolve its motion.
• ADPI sent a cease and desist letter to Clark Liberty regarding the importation and sale of "Fundador" brandy, which Clark Liberty ignored.
• ADPI filed a complaint for injunction and damages against Clark Liberty and government agencies with the RTC Manila, seeking to stop Clark Liberty's importation and sale activities.
• The RTC denied ADPI's application for injunctive relief, finding no proof of unfair competition (no deceit or bad faith shown) and no evidence that the imported bottles were different from ADPI's or were not genuine.
• ADPI elevated the case to the Court of Appeals via certiorari, challenging the RTC's denial of the injunction.
• The Court of Appeals dismissed the petition, citing lack of jurisdiction based on Section 21 of R.A. No. 7227, as Clark Liberty is a registered enterprise within the CSEZ.

• Petitioner ADPI argued that the Court of Appeals committed serious and reversible error in dismissing its petition for lack of jurisdiction under Rule 65.
• ADPI contended that the Court of Appeals gravely abused its discretion by not examining the merits of the case and determining if ADPI was entitled to injunctive relief.
• ADPI asserted that its cause of action (injunction based on alleged illegal importation/unfair competition) is distinct from and unrelated to the implementation of projects for the conversion of military reservations under R.A. No. 7227.
• ADPI maintained that the Court of Appeals possesses jurisdiction over certiorari petitions under Batas Pambansa Blg. 129, as amended, and cannot diminish this jurisdiction based on R.A. No. 7227.

• Respondents Clark Liberty and the Solicitor General argued that the Court of Appeals correctly dismissed the petition for lack of jurisdiction.
• They emphasized that Clark Liberty is admittedly a registered enterprise operating within the Clark Special Economic Zone, making it subject to R.A. No. 7227.
• They invoked Section 21 of R.A. No. 7227, which explicitly states that only the Supreme Court has jurisdiction to issue injunctions or restraining orders concerning the implementation of projects for the conversion of military reservations into alternative productive uses.
• They posited that Clark Liberty's operation as a registered enterprise within the CSEZ constitutes such a project under R.A. No. 7227.

• Whether the Court of Appeals erred in dismissing the petition for certiorari (CA-G.R. SP No. 63802) for lack of jurisdiction based on Section 21 of Republic Act No. 7227.

• The Supreme Court denied the petition and affirmed the Court of Appeals' decision.
• The Court reasoned that jurisdiction over the subject matter is conferred by law and determined not just by the complaint's allegations but by the law as applied to established facts.
• It was established that respondent Clark Liberty is a registered enterprise within the Clark Special Economic Zone, primarily regulated by R.A. No. 7227 (Bases Conversion and Development Act of 1992).
• The purpose of R.A. No. 7227 includes accelerating the conversion of former military bases (like Clark Air Base) into productive uses, encouraging private sector participation (Sec. 2 & 4).
• The establishment and operation of enterprises like Clark Liberty within the CSEZ are considered projects involving the private sector that convert the former military base into productive use.
• Section 21 of R.A. No. 7227 explicitly states that the implementation of such conversion projects "shall not be restrained or enjoined except by an order issued by the Supreme Court of the Philippines."
• Therefore, the Court concluded that the Court of Appeals correctly ruled it lacked jurisdiction to issue the injunctive relief sought by ADPI against Clark Liberty, as such jurisdiction is exclusively vested in the Supreme Court under Section 21 of R.A. No. 7227.

• Jurisdiction over the Subject Matter — This refers to the power of a court to hear and determine the general class of cases to which the particular proceeding belongs. It is conferred by law and cannot be granted by consent or waived. In this case, the Court reiterated that while generally determined by the complaint's allegations, where actual issues are evident from the record, jurisdiction depends on the law applied to established facts. The established fact that Clark Liberty operated within the CSEZ under RA 7227 was crucial.
• Statutory Construction (RA 7227, Sec. 21) — This involves interpreting the meaning and scope of a statute. The Court interpreted Section 21 of RA 7227 as vesting exclusive jurisdiction in the Supreme Court to issue injunctions against projects related to the conversion of former military bases under the Act. The Court determined that the operations of Clark Liberty, a registered enterprise in the CSEZ, fell under the category of "implementation of the projects for the conversion into alternative productive uses of the military reservations," thus barring lower courts, including the Court of Appeals, from issuing injunctions against it.

• "SEC. 21. Injunction and Restraining Order. – The implementation of the projects for the conversion into alternative productive uses of the military reservations are urgent and necessary and shall not be restrained or enjoined except by an order issued by the Supreme Court of the Philippines.”

• US vs. Limsiongco (1920); Herrera vs. Baretto and Joaquin (1913) — Cited to define jurisdiction as the authority to hear and determine a cause.
• Reyes vs. Diaz (1941) — Cited to define jurisdiction over the subject matter as the power to hear and determine the general class to which the proceedings belong.
• People vs. Jose de Martinez (1946) — Cited for the principle that jurisdiction over the subject matter is conferred by law and not by consent or erroneous belief of the court.
• Dionisio vs. Sioson Puerto (1974) — Cited for the basic rule that jurisdiction over the subject matter is determined by the cause(s) of action alleged in the complaint.
• Leoquinco vs. Canada Dry Bottling Co. of the Phil., Inc., Employees Association (1971) — Cited for the clarification that where actual issues are evident from the records, jurisdiction need not depend solely on the literal averments of the complaint but on the law as applied to established facts.

• Republic Act No. 7227 (Bases Conversion and Development Act of 1992) — The primary law governing the Clark Special Economic Zone and respondent Clark Liberty's operations.
  • Sec. 2 (Declaration of Policies) — Cited to show the government's policy to accelerate the conversion of military bases into productive uses.
  • Sec. 4 (Purposes of the Conversion Authority) — Cited specifically subsection (c) regarding encouraging private sector participation in transforming military reservations.
  • Sec. 21 (Injunction and Restraining Order) — The crucial provision establishing the Supreme Court's exclusive jurisdiction over injunctions related to conversion projects under the Act, forming the basis for the dismissal.
• Tariff and Customs Code, Sections 101(K) and 2530 — Referenced as the legal basis used by the Bureau of Customs for seizing Clark Liberty's shipment due to lack of BFAD registration.
• Batas Pambansa Blg. 129 (The Judiciary Reorganization Act of 1980) — Mentioned by petitioner as the source of the Court of Appeals' general jurisdiction over certiorari petitions.
• 1997 Rules of Civil Procedure, Rule 65 — The rule under which petitioner filed its special civil action for certiorari with the Court of Appeals.
• Department of Health Administrative Order No. 17, series of 1979 — Mentioned as the regulation requiring BFAD registration for imported food products, which ADPI complied with and Clark Liberty allegedly did not.