Allied Domecq Phil., Inc. vs. Villon

Under Section 21 of R.A. 7227, only the SC has jurisdiction to issue injunctions restraining the implementation of projects for the conversion of military reservations into alternative productive uses, which includes the operation of registered enterprises within the Clark Special Economic Zone.

R.A. 7227, or the Bases Conversion and Development Act of 1992, was enacted to accelerate the conversion of the Clark and Subic military reservations into alternative productive civilian uses, encouraging active private sector participation. To protect the urgency and necessity of these conversion projects, Section 21 of the law restricts the power to issue injunctions or restraining orders against them exclusively to the SC.

• Original Filing: RTC of Manila, Branch 23, Civil Case No. 99-95337 (Complaint for injunction and damages with prayer for TRO and writ of preliminary injunction)
• Lower Court Decision: August 15, 2000 — RTC denied the application for TRO and injunctive relief; December 28, 2000 — RTC denied motion for reconsideration
• Appeal: Petition for Certiorari to the CA (CA-G.R. SP No. 63802)
• CA Decision: May 27, 2002 — CA dismissed the petition for lack of jurisdiction; November 29, 2002 — CA denied reconsideration
• SC Action: Petition for Review on Certiorari under Rule 45 assailing the CA's dismissal

• Exclusive Distributorship: On May 8, 1996, ADPI entered into an exclusive distributorship agreement with Pedro Domecq, S.A. (Spain) to import and distribute "Fundador" brandy in the Philippines until May 17, 2000, with automatic extension.
• BFAD Regulation: ADPI applied for a Certificate of Registration with the BFAD for imported food products. On June 2, 1998, BFAD requested the Bureau of Customs (BoC) to block Fundador entries without a valid BFAD certificate. The BoC granted the request via Customs Memorandum Circular No. 228-098 on July 13, 1998.
• Importation by Clark Liberty: On April 12, 1999, Clark Liberty, a duly licensed duty-free shop in the Clark Special Economic Zone, imported 800 cases of Fundador brandy without a BFAD Certificate of Product Registration.
• Seizure: The BoC seized and impounded the shipment pursuant to CMC No. 228-98 and Sections 101(K) and 2530 of the Tariff and Customs Code, docketed as S.I. No. 99-140.
• Intervention and Demand: ADPI filed a motion to intervene in the seizure proceedings, which the District Collector failed to resolve. On September 15, 1999, ADPI sent Clark Liberty a cease-and-desist letter, which Clark Liberty ignored.
• RTC Action: On October 8, 1999, ADPI filed a complaint for injunction and damages with the RTC. The RTC denied the TRO and injunction on August 15, 2000, finding no evidence of unfair competition, bad faith, or that the imported brandy was defective or of poor quality.
• CA Action: ADPI filed a certiorari petition with the CA. The CA dismissed the petition on May 27, 2002, holding that Clark Liberty is a juridical creation of R.A. 7227 and, under Section 21 of the law, only the SC can issue injunctive relief against conversion projects.

• The CA gravely abused its discretion in holding that Section 21 of R.A. 7227 deprives it of jurisdiction.
• ADPI's cause of action has nothing to do with the implementation of projects for the conversion of military reservations into alternative productive uses.
• Jurisdiction is conferred by law; the CA cannot diminish its own jurisdiction under Batas Pambansa Blg. 129.

• The CA correctly dismissed the petition for lack of jurisdiction.
• Clark Liberty is a registered enterprise of the Clark Special Economic Zone, subject to R.A. 7227.
• Under Section 21 of R.A. 7227, only the SC has jurisdiction to grant injunctive relief to enjoin the implementation of conversion projects.

• Procedural Issues: Whether the CA gravely abused its discretion in dismissing the certiorari petition for lack of jurisdiction under Section 21 of R.A. 7227.
• Substantive Issues: Whether the operation of a registered enterprise within the Clark Special Economic Zone constitutes a "project for the conversion into alternative productive uses of the military reservations" under Section 21 of R.A. 7227.

• Procedural: The CA did not gravely abuse its discretion. Jurisdiction over the subject matter is conferred by law and determined by the causes of action as alleged in the complaint, or where actual issues are evident from the records, by the law as applied to established facts. Because the case falls squarely under Section 21 of R.A. 7227, the CA correctly declined jurisdiction.
• Substantive: The operation of Clark Liberty as a registered enterprise within the Clark Special Economic Zone constitutes a "project for conversion." R.A. 7227 aims to accelerate the conversion of the Clark military reservation into alternative productive uses and encourages active private sector participation (Section 4(c)). The establishment, registration, and operation of Clark Liberty and similar enterprises are projects involving the private sector that transform Clark Air Base into productive uses. Therefore, any injunction against such operations falls under the exclusive jurisdiction of the SC.

• Jurisdiction over the Subject Matter — The power to hear and determine the general class to which the proceedings in question belong. It is conferred by law and cannot be determined by the consent or acquiescence of the parties or by the erroneous belief of the court. It is determined by the causes of action as alleged in the complaint, but where actual issues are evident from the records, it depends on the law as applied to established facts.

• Section 21, Republic Act No. 7227 — Provides that the implementation of projects for the conversion of military reservations into alternative productive uses shall not be restrained or enjoined except by an order issued by the SC. The SC applied this to hold that the CA lacked jurisdiction to enjoin the operations of a registered enterprise in the Clark Special Economic Zone.
• Section 2, Republic Act No. 7227 — Declaration of policies to accelerate the sound and balanced conversion of the Clark and Subic military reservations into alternative productive uses.
• Section 4(c), Republic Act No. 7227 — Purpose of the Conversion Authority to encourage active private sector participation in transforming the military reservations into other productive uses.
• Sections 101(K) and 2530, Tariff and Customs Code — Legal basis for the BoC's seizure and impoundment of the imported brandy lacking BFAD registration.