In Re: Exemption of the National Power Corporation from Payment of Filing/Docket Fees

A government-owned or controlled corporation cannot claim exemption from the payment of legal fees based on a legislative grant, as the power to fix and exempt the payment of filing fees falls within the Supreme Court's exclusive constitutional rule-making power over pleading, practice, and procedure.

The National Power Corporation (NPC) previously invoked Section 13 of Republic Act No. 6395, as amended by Presidential Decree No. 938, to claim exemption from filing fees, appeal bonds, and supersedeas bonds. On December 6, 2005, the Court recognized this exemption upon the recommendation of the Office of the Court Administrator. However, on October 27, 2009, the Court reversed its stance and denied the request for exemption upon the recommendation of the Committee on the Revision of the Rules of Court, citing the Court's exclusive rule-making power under the Constitution. NPC subsequently wrote to the Court seeking clarification on its status given the conflicting administrative issuances.

• NPC's Charter Exemption: NPC's charter, Republic Act No. 6395, as amended by Presidential Decree No. 938, contained provisions granting the corporation exemption from filing fees, appeal bonds, and supersedeas bonds.
• Conflicting Court Issuances: On December 6, 2005, the Court declared NPC exempt from these fees based on its charter. On October 27, 2009, the Court reversed this position and denied the exemption, finding that the legislative grant ran counter to the Court's exclusive constitutional rule-making power.
• Request for Clarification: NPC wrote to the Court seeking clarification on whether it remained exempt from paying filing and court fees in light of the conflicting resolutions.
• Statutory Classification: Section 70 of Republic Act No. 9136 (Electric Power Industry Reform Act of 2001) expressly classifies NPC as a national government-owned and controlled corporation.

• Statutory Exemption: NPC sought clarification on its continued exemption from filing fees, appeal bonds, and supersedeas bonds based on Section 13 of Republic Act No. 6395, as amended by Section 13 of Presidential Decree No. 938.

• Constitutional Prerogative: The Committee on the Revision of the Rules of Court argued that a legislative grant of exemption from filing fees runs counter to Section 5(5), Article VIII of the Constitution, which vests the sole power to fix filing fees in the Supreme Court as part of its rule-making authority.
• Rule 141 Exclusion: Under Section 22 of Rule 141 of the Rules of Court, government-owned or controlled corporations, regardless of whether they possess independent charters, are expressly not exempt from paying legal fees.

• Exemption from Legal Fees: Whether the National Power Corporation is exempt from the payment of filing fees, appeal bonds, and supersedeas bonds.
• Constitutional Limit on Legislative Power: Whether Congress can grant an exemption from the payment of legal fees in light of the Supreme Court's exclusive rule-making power over pleading, practice, and procedure.

• Exemption from Legal Fees: NPC is not exempt from the payment of legal fees. As a government-owned or controlled corporation, it is expressly excluded from the exemption under Section 22, Rule 141 of the Rules of Court, which applies only to the Republic, its agencies, and instrumentalities.
• Constitutional Limit on Legislative Power: Congress cannot grant exemptions from the payment of legal fees. The 1987 Constitution removed Congress's power to repeal, alter, or supplement rules concerning pleading, practice, and procedure. Because the payment of legal fees is a vital component of procedural rules, a legislative grant of exemption impermissibly encroaches upon the Court's exclusive constitutional domain.

• Exclusive Rule-Making Power of the Supreme Court — Under Section 5(5), Article VIII of the 1987 Constitution, the Supreme Court possesses the exclusive power to promulgate rules concerning pleading, practice, and procedure. Unlike under the 1935 and 1973 Constitutions, Congress no longer shares this power and cannot repeal, alter, or supplement these procedural rules. Because the payment of legal fees is a vital component of such rules, Congress cannot validly annul, change, or modify the Court's rules on filing fees, including granting exemptions. The separation of powers prevents the legislative and executive branches from trespassing upon this exclusive prerogative.

• "Since the payment of legal fees is a vital component of the rules promulgated by this Court concerning pleading, practice and procedure, it cannot be validly annulled, changed or modified by Congress. As one of the safeguards of this Court’s institutional independence, the power to promulgate rules of pleading, practice and procedure is now the Court’s exclusive domain. That power is no longer shared by this Court with Congress, much less the Executive."
• "The separation of powers among the three co-equal branches of our government has erected an impregnable wall that keeps the power to promulgate rules of pleading, practice and procedure within the sole province of this Court. The other branches trespass upon this prerogative if they enact laws or issue orders that effectively repeal, alter or modify any of the procedural rules promulgated by this Court."

• Echegaray v. Secretary of Justice, 361 Phil. 76 (1999) — Followed. Relied upon to trace the evolution of the Court's rule-making power and to establish that the 1987 Constitution removed Congress's power to repeal, alter, or supplement procedural rules promulgated by the Supreme Court.
• In re: Petition for Recognition of the Exemption of the Government Service Insurance System (GSIS) from Payment of Legal Fees, A.M. No. 08-2-01-0 — Relied upon. The Court used its ruling in the GSIS case, promulgated shortly before this resolution, to reinforce the principle that legislative grants of fee exemptions are invalid encroachments on judicial independence.

• Section 5(5), Article VIII, 1987 Constitution — Vests the Supreme Court with the exclusive power to promulgate rules concerning pleading, practice, and procedure, removing Congress's prior power to repeal, alter, or supplement such rules. Applied to invalidate the legislative grant of exemption from filing fees.
• Section 22, Rule 141, Rules of Court — Exempts the Republic of the Philippines, its agencies, and instrumentalities from paying legal fees, but expressly excludes local government units and government-owned or controlled corporations. Applied to deny NPC's exemption based on its classification as a GOCC.
• Section 13, Republic Act No. 6395 (as amended by Section 13, Presidential Decree No. 938) — NPC's charter provision previously granting exemption from filing fees, appeal bonds, and supersedeas bonds. Held to be an invalid basis for exemption because it encroaches on the Supreme Court's exclusive rule-making power.
• Section 70, Republic Act No. 9136 (EPIRA) — Expressly classifies NPC as a national government-owned and controlled corporation. Applied to bring NPC within the Rule 141 exclusion for GOCCs.

Reynato S. Puno (Chief Justice), Antonio T. Carpio, Renato C. Corona, Conchita Carpio Morales, Presbitero J. Velasco, Jr., Antonio Eduardo B. Nachura, Teresita J. Leonardo-De Castro, Arturo D. Brion, Diosdado M. Peralta, Lucas P. Bersamin, Mariano C. Del Castillo, Roberto A. Abad, Martin S. Villarama, Jr., Jose Portugal Perez.