National Power Corporation vs. Vera

Courts are divested of jurisdiction to issue any restraining order, preliminary injunction, or preliminary mandatory injunction in cases involving government infrastructure projects, public utilities operated by the government, or stevedoring and arrastre contracts, pursuant to Presidential Decree No. 1818. A government-owned corporation likewise possesses implied power to perform acts reasonably necessary and incidental to its stated corporate purposes, even without express charter authorization, and mandamus will not lie to control the exercise of a corporation’s business discretion.

NPC owns and operates the Batangas Coal-Fired Thermal Power Plant in Calaca, Batangas. The plant receives coal shipments at an NPC-owned pier, and the unloading of those shipments—stevedoring and arrastre services—is integral to fueling the power plant. Sea Lion International Port Terminal Services, Inc. previously held a contract with NPC to provide stevedoring services for coal-handling operations at the pier. That contract lapsed without renewal, and NPC thereafter undertook the services itself under a permit issued by the Philippine Ports Authority (PPA). Sea Lion’s own PPA permit for the same pier had also expired.

• Nature of the action: Sea Lion International Port Terminal Services, Inc. filed a complaint for prohibition and mandamus with damages against NPC and PPA, alleging that NPC acted in bad faith and with grave abuse of discretion in not renewing its Contract for Stevedoring Services for Coal-Handling Operations and in taking over the stevedoring services itself.
• NPC’s Calaca pier and power plant: NPC owned and operated the Batangas Coal-Fired Thermal Power Plant in Calaca, Batangas, with an adjacent pier that received coal shipments used exclusively to fuel the plant.
• Sea Lion’s expired entitlements: Sea Lion’s stevedoring services contract with NPC had already expired before the complaint was filed. Further, Sea Lion’s permit from the Philippine Ports Authority (PPA) to conduct cargo-handling services at NPC’s Calaca pier had likewise expired. No contractual relationship existed between the parties at the time of the suit.
• NPC’s self-operation: After the contract expired, NPC undertook the stevedoring and arrastre services itself, having obtained a cargo-handling permit from the PPA for its own pier. NPC was under no legal obligation to renew the contract with Sea Lion.
• RTC’s findings and order: Respondent judge found that NPC’s Charter, Republic Act No. 6395, as amended, did not empower NPC to engage in stevedoring and arrastre services. Consequently, a writ of preliminary injunction was issued restraining NPC from undertaking the services and further directing NPC to either contract out the services or conduct a public bidding, while allowing Sea Lion to continue.

• Jurisdiction under P.D. 1818: Petitioner argued that Section 1 of Presidential Decree No. 1818 explicitly prohibits any Philippine court from issuing a restraining order or preliminary injunction in cases involving government-operated public utilities, including stevedoring and arrastre contracts, and that NPC is a government public utility created by special law.
• Absence of a clear right: Petitioner maintained that Sea Lion’s stevedoring contract and PPA permit had both expired, no legal obligation to renew existed, and therefore Sea Lion failed to demonstrate the existence of a right warranting injunctive protection.
• Implied corporate power: Petitioner contended that undertaking stevedoring services at its own pier to unload coal essential to power generation is an act reasonably necessary and incidental to its chartered purpose and falls within the implied powers recognized for corporations.

• Ultra vires acts: Private respondent Sea Lion asserted that NPC’s Charter, Republic Act No. 6395, as amended, does not authorize it to perform stevedoring and arrastre services, making its takeover of those services an act contrary to law and a grave abuse of discretion.
• Entitlement to injunction: Private respondent argued that NPC’s refusal to renew the contract and its assumption of services violated Sea Lion’s rights and justified the issuance of the writ of preliminary injunction to preserve the status quo and protect its interests.

• Jurisdiction under P.D. 1818: Whether the trial court had jurisdiction to issue a writ of preliminary injunction against NPC, a government public utility, in light of the absolute prohibition in Presidential Decree No. 1818.
• Implied corporate power: Whether NPC’s Charter empowered it to undertake stevedoring and arrastre services at its pier as an act incidental to its power-generation operations.
• Propriety of the injunction and mandamus: Whether the respondent judge gravely abused his discretion in issuing the writ of preliminary injunction, and in directing NPC to contract out or bid the services despite the absence of a clear legal right in Sea Lion and the discretionary nature of NPC’s decision.

• Jurisdiction under P.D. 1818: The respondent judge acted wholly without jurisdiction. Section 1 of Presidential Decree No. 1818 unambiguously strips Philippine courts of authority to issue any restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute, or controversy involving an infrastructure project or any public utility operated by the government, expressly including stevedoring and arrastre contracts. NPC is established by special legislation to generate and distribute electric power and is undeniably a government-operated public utility; it therefore enjoys the full protection of the decree. The injunction was void ab initio for want of jurisdiction.
• Implied corporate power: NPC is empowered under its Charter to perform stevedoring and arrastre services. Section 3(l) of Republic Act No. 6395, as amended, authorizes NPC to “exercise such powers and do such things as may be reasonably necessary to carry out the business and purposes for which it was organized.” Applying the standard distilled from Montelibano v. Bacolod-Murcia Milling Co., a corporate act is within charter powers if it is lawful, not prohibited, performed to serve corporate ends, and reasonably contributes to those ends in a substantial rather than remote or fanciful sense. NPC’s pier exclusively serves its coal-fired thermal plant; unloading the coal shipments is indispensable and incidental to the generation of electricity. The trial court’s contrary finding was erroneous.
• Propriety of the injunction and mandamus: The assailed order was issued with grave abuse of discretion. First, a preliminary injunction requires a clear showing of a right to be protected and an act violative of that right. Sea Lion’s stevedoring contract with NPC and its PPA permit had both expired; no legal obligation compelled NPC to renew. Consequently, no right existed that an injunction could preserve. Second, the directive that NPC either contract out or bid the services constituted a mandatory injunction akin to mandamus. Mandamus lies exclusively to compel performance of a ministerial duty clearly and peremptorily enjoined by law. The decision whether to self-operate stevedoring services or engage a contractor is a purely corporate prerogative involving judgment and discretion, which courts cannot control or review through mandamus.

• Presidential Decree No. 1818 jurisdictional bar — Section 1 of P.D. 1818 removes from Philippine courts the jurisdiction to issue any restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute, or controversy involving an infrastructure project, a government-operated public utility, or stevedoring and arrastre contracts. The prohibition covers any lawful activity necessary for the execution, implementation, or operation of the project or public utility. A government-owned entity created by special law to generate and distribute electricity falls squarely within the protected class of government public utilities; any injunction issued against it in such matters is void for lack of jurisdiction.
• Implied corporate powers / reasonable necessity test — A corporation possesses not only the powers expressly granted by its charter but also those powers that are reasonably necessary or proper to promote its corporate interests and accomplish its stated purposes. The operative test is whether the act is lawful, not otherwise prohibited, done to serve corporate ends, and whether it reasonably contributes to the promotion of those ends in a substantial and not a remote or fanciful sense (Montelibano v. Bacolod-Murcia Milling Co.). Stevedoring services that unload the exclusive fuel supply of a power plant are incidental and indispensable to the plant’s operation and fall within the corporation’s implied authority.
• Requisites for preliminary injunction — A writ of preliminary injunction demands that the complainant clearly show: (a) the existence of a right to be protected, and (b) that the acts sought to be enjoined violate that right. Where the complainant’s contract and operational permit have both expired and the opposing party owes no legal duty to renew them, no protectable right exists.
• Scope of mandamus (ministerial versus discretionary duties) — Mandamus will lie only to compel the performance of a ministerial duty—one clearly and peremptorily enjoined by law or by reason of official station. It does not lie to enforce contractual obligations, to compel a particular course of corporate conduct, or to control or review the exercise of discretion. The choice whether to self-operate services or to contract them out is a purely corporate prerogative beyond the reach of mandamus.

• “No court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction, or preliminary mandatory injunction in any case, dispute, or controversy involving an infrastructure project, or a mining, fishery, forest or other natural resource development project of the government, or any public utility operated by the government, including among others public utilities for the transport of the goods or commodities, stevedoring and arrastre contracts…” — The Court’s reproduction of Section 1, P.D. 1818, the statutory foundation for ousting the trial court’s jurisdiction.
• “In determining whether or not an NPC act falls within the purview of the above provision, the Court must decide whether or not a logical and necessary relation exists between the act questioned and the corporate purpose expressed in the NPC charter. For if that act is one which is lawful in itself and not otherwise prohibited, and is done for the purpose of serving corporate ends, and reasonably contributes to the promotion of those ends in a substantial and not in a remote and fanciful sense, it may be fairly considered within the corporation's charter powers.” — The controlling formulation of the implied corporate powers test, quoting Montelibano.
• “Before a writ of preliminary injunction may be issued, there must be a clear showing by the complainant that there exists a right to be protected and that the acts against which the writ is to be directed are violative of the said right.” — The two-fold requisite standard for a preliminary injunction.
• “It is a settled rule that mandamus will lie only to compel the performance of a ministerial duty; it does not lie to require anyone to fulfill contractual obligations or compel a course of conduct, nor to control or review the exercise of discretion.” — Definition of the limited reach of mandamus, excluding corporate discretion.

• Montelibano v. Bacolod-Murcia Milling Co., Inc., G.R. No. L-15092, May 18, 1962, 5 SCRA 36 — Applied as the controlling standard for determining whether a corporate act falls within implied charter powers; the “substantial and not remote” contribution test was drawn directly from this case.
• Republic v. Acoje Mining Company, Inc., G.R. No. L-18062, February 28, 1963, 7 SCRA 361 — Followed to reinforce the rule that a corporation may do what is reasonably necessary to promote its welfare, even without express charter provision, as when a mining company was held authorized to operate postal facilities for its remote camp.
• Teresa Electric & Power Co., Inc. v. Public Service Commission, G.R. No. L-21804, September 25, 1967, 21 SCRA 198 — Cited to illustrate the broad interpretation of incidental powers; a cement manufacturer was deemed authorized to operate an electric power plant solely for its own use as necessarily connected to its business.
• Tabigue v. Duvall, 16 Phil. 324 (1910) — Invoked as the foundational authority for the principle that mandamus will enforce only duties that are clearly and peremptorily enjoined by law or official station.
• Sy Ha v. Galang, G.R. No. L-18513, April 27, 1963, 7 SCRA 797; Aprueba v. Ganzon, G.R. No. L-20867, September 3, 1966, 18 SCRA 8; Avenue Arrastre & Stevedoring Corp. v. Commissioner of Customs, G.R. No. L-44674, February 28, 1983, 120 SCRA 878; Tangonan v. Pano, G.R. No. L-45157, June 27, 1985, 137 SCRA 245 — String-cited to fortify the rule that mandamus will not lie to control or review the exercise of discretion.

• Section 1, Presidential Decree No. 1818 — Divests Philippine courts of jurisdiction to issue restraining orders, preliminary injunctions, or preliminary mandatory injunctions in cases involving government infrastructure projects, public utilities operated by the government, or stevedoring and arrastre contracts. Applied to nullify the trial court’s injunction order as a void act taken without jurisdiction.
• Section 3(l), Republic Act No. 6395, as amended (NPC Charter) — Empowers NPC to “exercise such powers and do such things as may be reasonably necessary to carry out the business and purposes for which it was organized.” Interpreted to confer implied authority on NPC to undertake stevedoring and arrastre services at its own pier as an activity incidental and indispensable to the operation of its coal-fired power plant.

Chief Justice Fernan, and Justices Gutierrez Jr., Feliciano, and Bidin, concurred.