Primary Holding

The Supreme Court held that the Court of Appeals did not err in dismissing the petition for lack of jurisdiction, as Section 21 of R.A. 7227 explicitly states that only the Supreme Court can issue injunctive relief concerning projects for the conversion of military reservations into alternative productive uses.

Background

This case originated from a distributorship agreement between Allied Domecq Philippines Inc. (ADPI) and Pedro Domecq, S.A. of Spain for the exclusive distribution of "Fundador" brandy in the Philippines. When Clark Liberty Warehouse imported the brandy without BFAD certification, ADPI sought injunctive relief, leading to a jurisdictional dispute that reached the Supreme Court.

Facts

• 1. ADPI had exclusive distributorship rights for Fundador brandy in the Philippines
• 2. ADPI obtained BFAD certification for importation
• 3. Clark Liberty imported 800 cases of Fundador brandy without BFAD certification
• 4. Bureau of Customs seized the shipment
• 5. ADPI attempted to intervene in seizure proceedings
• 6. ADPI filed for injunctive relief with RTC Manila
• 7. Case progressed through courts on jurisdictional grounds

Arguments of the Petitioners

• 1. Court of Appeals has jurisdiction under BP 129
• 2. The case has nothing to do with military reservation conversion projects
• 3. Court of Appeals cannot diminish its own jurisdiction

Arguments of the Respondents

• 1. Clark Liberty is subject to RA 7227
• 2. Only Supreme Court has jurisdiction for injunctive relief under Section 21
• 3. Case falls under military reservation conversion jurisdiction

Issues

• 1. Whether the Court of Appeals gravely abused its discretion in holding that it has no jurisdiction over CA-G.R. SP No. 63802 pursuant to Section 21 of Republic Act 7227

Ruling

• 1. The Supreme Court affirmed the Court of Appeals' decision
• 2. Clark Liberty's operations fall under RA 7227's scope
• 3. The law explicitly reserves injunctive powers to Supreme Court
• 4. The establishment and operation of enterprises in Clark SEZ are conversion projects under RA 7227

Doctrines

• 1. Jurisdiction over Subject Matter: (1) Determined by law, not consent of parties (2) Based on causes of action in complaint (3) When evident from records, actual issues may determine jurisdiction
• 2. Military Base Conversion: (1) Projects for conversion are urgent and necessary (2) Special jurisdictional rules apply (3) Private sector participation is encouraged

Precedents Cited

• 1. US vs. Limsiongco (41 Phil. 94, 101, 1920) - Defined jurisdiction as authority to hear and determine a cause
• 2. Herrera vs. Baretto and Joaquin (25 Phil. 245, 251, 1913) - Established principles of jurisdiction over subject matter
• 3. People vs. Jose de Martinez (76 Phil. 599, 601, 1946) - Confirmed jurisdiction is conferred by law, not consent

Statutory and Constitutional Provisions

• 1. Republic Act No. 7227 (Bases Conversion and Development Act of 1992) Section 2: Declaration of Policies - This section declares the government policy to accelerate the sound and balanced conversion of military reservations into alternative productive uses. The law aims to promote economic and social development in Central Luzon and the country in general.
• 2. Republic Act No. 7227 Section 4: Purposes of Conversion Authority - This section outlines the purposes of the Conversion Authority, particularly emphasizing the encouragement of private sector participation in transforming military reservations into other productive uses.
• 3. Republic Act No. 7227 Section 21: Injunction and Restraining Order - This crucial section explicitly states that implementation of conversion projects shall not be restrained or enjoined except by Supreme Court order, establishing exclusive jurisdiction for injunctive relief.
• 4. Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980) - This law was referenced regarding the general jurisdiction of the Court of Appeals, though the Supreme Court ultimately determined that the specific provisions of RA 7227 prevailed in this case.