Shuley Mine, Inc. vs. Department of Environment and Natural Resources

A writ of preliminary injunction may issue only upon proof of a clear and unmistakable right in esse; where the mining operating agreement from which the applicant derives its right to operate had already expired at the time it sought injunctive relief, no such right exists, and the RTC's grant of the writ amounts to grave abuse of discretion. Mineral agreements entered into by the State partake of the nature of both a permit and a contract, and are imbued with public interest such that the Regalian Doctrine requires a strict interpretation favoring the preservation of mineral resources in the State pending controversies over their exploration, extraction, transportation, or exportation.

The Philippine Government and Philnico Mining and Industrial Corporation (Philnico) entered into Mineral Production Sharing Agreement (MPSA) No. 072-97-XIII (SMR) on September 2, 1994, covering approximately 25,000 hectares in Cagdianao, Surigao del Norte and Hanigad, Awasan and Nonoc Islands, Surigao City within the Surigao Mineral Reservation; the agreement was approved by the President on January 20, 1995, and later amended through the Amended and Restated Definitive Agreement (ARDA) to conform with Republic Act No. 7942, the Philippine Mining Act of 1995, and DENR Department Administrative Order No. 96-40. Philnico assigned its mining rights to Pacific Nickel Philippines, Inc. (Pacific Nickel) and its processing rights to Nonoc Mining & Industrial Corporation under a Deed of Assignment dated May 2, 1997. On April 29, 2009, Pacific Nickel, as MPSA holder, entered into a Mines Operating Agreement (MOA) with petitioner Shuley Mine, Inc. (SMI), under which SMI would act as Operator for the extraction, hauling, shipment, and marketing of nickel ore within a 1,174-hectare contract mining area in Nonoc Island, Surigao del Norte. The Regalian Doctrine, as embodied in the 1935, 1973, and 1987 Constitutions, supplies the constitutional backdrop: all lands of the public domain and all minerals and mineral lands belong to the State.

On September 2, 1994, the Philippine Government and Philnico Mining and Industrial Corporation (Philnico) entered into Mineral Production Sharing Agreement (MPSA) No. 072-97-XIII (SMR) for the exploration, development, and commercial utilization of nickel ores covering about 25,000 hectares in Cagdianao, Surigao del Norte and Hanigad, Awasan and Nonoc Islands, Surigao City within the Surigao Mineral Reservation; the agreement was approved by the President on January 20, 1995. On May 2, 1997, Philnico entered into a Deed of Assignment with Pacific Nickel Philippines, Inc. (Pacific Nickel) and Nonoc Mining & Industrial Corporation, assigning its mining rights to Pacific Nickel and its processing rights to Nonoc Mining, subject to the same terms and conditions under the MPSA. On August 7, 1997, the MPSA was amended by virtue of the Amended and Restated Definitive Agreement (ARDA) to conform with Republic Act No. 7942, the Philippine Mining Act of 1995, and DENR Department Administrative Order No. 96-40.

On April 27, 2009, Pacific Nickel, as holder of the MPSA, entered into a Mines Operating Agreement (MOA) with petitioner Shuley Mine, Inc. (SMI), under which SMI agreed to perform mining activities — extraction, hauling, shipment, and marketing of nickel ore — within the 1,174-hectare contract mining area in Nonoc Island, Surigao del Norte as Operator, and to assume and perform all of Pacific Nickel's obligations under the MOA and the MPSA. The contract period was 48 months from the date of the agreement, or from April 27, 2009 to April 27, 2013. On June 2, 2009, the MOA was registered with the MGB Regional Office No. XIII, and it was approved by the MGB Central Office in an Order dated July 23, 2009. In September 2009, SMI and Pacific Nickel entered into a Supplemental Agreement providing, among others, that the four-year effectivity of the MOA would commence on the date of approval of the Partial Declaration of Mining Project Feasibility (DMPF) pertaining to the contract area; this Supplemental Agreement was registered with MGB RO No. XIII on December 20, 2010. SMI alleged that the MGB approved the DMPF in an Order dated April 8, 2010, so that, pursuant to the Supplemental Agreement, the MOA became operative from April 8, 2010 until April 8, 2014, and SMI immediately conducted mining operations.

Pursuant to a May 18, 2011 letter of the Finance Secretary calling attention to the continuing mining activities in the contract area despite Philnico's non-payment of US$263,762,000.00 due to the government under the ARDA, Dir. Jasareno issued a Memorandum dated May 20, 2011 directing then Acting Regional Director Alilo C. Ensomo, Jr. to immediately suspend the Ore Transport Permits (OTPs) and Mineral Ore Export Permits (MOEPs) issued to Philnico and its assignees, and to suspend acceptance of applications for and issuance of the same permits for minerals and ore extracted from the contract area. RD Ensomo sent a letter of even date to Pacific Nickel directing compliance. Pacific Nickel filed separate petitions for injunction with the RTC of Surigao City, docketed as Civil Case Nos. 7404 and 7405 and raffled to Branches 30 and 29; both trial courts issued temporary restraining orders, later converted to writs of preliminary injunction in Orders dated June 30, 2011 and July 25, 2011. The DENR and MGB assailed these Orders before the CA via petitions for certiorari docketed as CA-G.R. SP Nos. 04479-MIN and 04688-MIN.

In view of the writs prohibiting implementation of the May 20, 2011 directive, SMI alleged that it negotiated with the Department of Finance, DENR, and MGB to be allowed to continue its mining operations in Nonoc Island, and thereafter applied for OTPs and MOEPs. Despite the writs and its payment of the MGB royalty fee, SMI claimed that MGB RO XIII refused to issue OTPs and MOEPs in its favor. On October 12, 2012, Roger A. De Dios, the Regional Director of MGB who replaced RD Ensomo, after being served with a formal demand letter by SMI, seeking clearance from his superiors, and conducting several technical conferences and site visits, issued the requested OTPs and MOEPs to SMI. In a letter dated December 6, 2012, CPO Singson brought to Dir. Jasareno's attention the continuous withdrawal and loading of ore materials within the contract area and the continued issuance by RD De Dios of OTPs, explaining that the case for recovery of the debt owed to the National Government amounting to USD300 Million remained pending and that its eventual recovery lay in the value of the mineral deposits remaining in the area; she urged the MGB to preserve the contract area by ensuring strict compliance with mining laws prior to allowing operators such as SMI to withdraw or ship out minerals.

In a letter dated April 18, 2013, Pacific Nickel informed the Finance Secretary that, by virtue of the OTPs and MOEPs SMI secured from MGB, SMI was able to ship out approximately 270,000 WMT of nickel ores from the contract area, but that SMI undertook these activities without Pacific Nickel's prior clearance and in violation of the terms and conditions of their MOA; Pacific Nickel stated that it had sent a letter dated April 8, 2013 to SMI's President, Mr. Antonio L. Co, to "suspend all mining and hauling operations in Nonoc Island" until SMI complied with all legal requisites, and that its due diligence showed a possible need to amend the Project's Environmental Compliance Certificate and Declaration of Mining Project Feasibility due to changes in the nature and grade of the materials being mined. In another letter dated April 22, 2013 addressed to RD De Dios, copy furnished to Dir. Jasareno and Sec. Paje, Pacific Nickel informed them that it had directed SMI to immediately suspend all mining and hauling activities until it complied with all legal requisites, explaining that SMI mined nickel ores with grades up to 1.79%, beyond the allowed ore grade approved by the MGB under the Declaration of Mining Feasibility Study (DMFS); Pacific Nickel requested RD De Dios to suspend SMI's right to transport and ship ore under its OTPs and MOEPs and to temporarily suspend issuance of additional OTPs and MOEPs until SMI complied with all legal requirements. On April 24, 2013, RD De Dios ordered SMI to respond to Pacific Nickel's complaint within five days from notice.

In a letter dated April 25, 2013, SMI countered that it did not go beyond the purportedly allowable nickel ore grade, asserting that under the Philippine Mining Act of 1995 the purpose of the DMFS was only to determine the commercial viability of a mining project and not to put a limit on what could be extracted, and that a perusal of the approved DMFS would show that it was not limited to extracting nickel ore with a grade lower than 1.5% but could in fact extract nickel ore with grades ranging from 0.92% to 2.10%; it denied agreeing to stop its mining operations and claimed it had always complied with legal requirements, never having received any notice of violation from the MGB or the EMB. In a Memorandum dated May 7, 2013, Dir. Jasareno directed RD De Dios not to issue any OTP or MOEP under the subject MPSA and to suspend or stop mining operations under the said MPSA pending resolution of the issues raised by Pacific Nickel and PMO. In compliance, RD De Dios wrote SMI on May 8, 2013 directing it to temporarily suspend its mining operations in the contract area at once. On May 20, 2013, Dir. Jasareno informed SMI that its MOA with Pacific Nickel had already expired on April 27, 2013, and that the July 23, 2009 Order approving the conduct of the activities was no longer in force and effect from the date of expiration.

Consequently, on May 25, 2013, SMI filed a complaint with an application for a temporary restraining order and preliminary prohibitory and mandatory injunction before the RTC to enjoin the respondents from preventing it from conducting mining and shipping operations in the contract area. On May 27, 2013, the RTC issued an ex-parte TRO enjoining the respondents to preserve the status quo and restraining them from preventing or disallowing SMI's mining and shipping operations for seventy-two (72) hours from the date of the Order. On May 30, 2013, the RTC issued a TRO and set the case for hearing on SMI's prayer for a writ of preliminary injunction on June 13 and 14, 2013. After receiving and evaluating the parties' evidence, the RTC granted SMI's application for a writ of preliminary injunction, subject to its posting of a bond in the amount of P1M, in its June 14, 2013 Order; the RTC found established, at the very least, that Pacific Nickel and SMI had entered into the subject MOA which bore the approval of the MGB Director, and that Pacific Nickel and SMI had entered into the Supplemental MOA which was registered with MGB Regional Office No. XIII, and it noted that no less than MGB Regional Director Roger De Dios had found in MGB Memorandum No. RD-MMD-13-04-00 dated April 26, 2013 that the MOA between Pacific Nickel and SMI was still valid and effective until April 2014. On June 17, 2013, the RTC issued the writ of preliminary injunction restraining and enjoining the respondents from impeding SMI's mining and shipping operations and directing the MGB Regional Director to issue and release the OTPs and MOEPs and to grant future applications.

On June 21, 2013, SMI sent a letter to Dir. Jasareno attaching a copy of the Writ and demanding compliance, particularly the issuance of the OTPs and MOEPs already applied and paid for. On June 26, 2013, the MGB Central Office, through MGB Mining Technology Division Officer-in-Charge Esteban C. Martin, denied SMI's request for the issuance of the OTPs and MOEPs premised on the expiration of the MOA between SMI and Pacific Nickel, citing the lack of proof of approval of the September 29, 2009 Supplemental Agreement pursuant to Section 4 of DMO No. 2004-09 and holding in abeyance the further processing of the OTP and MOEP applications pending compliance with the cited deficiency. Without filing a motion for reconsideration, the respondents elevated the matter to the CA via a petition for certiorari; the CA issued a TRO on September 5, 2013 and a Writ of Preliminary Injunction on October 25, 2013. On June 13, 2014, the CA rendered the assailed Decision annulling and setting aside the RTC's June 14, 2013 Order and June 17, 2013 Writ of Preliminary Injunction on the ground that the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction in granting the application and issuing the writ despite the lack of a clear and unmistakable right on SMI's part in view of the expiration of the MOA on April 27, 2013; the CA also held that even assuming the MGB approved the Supplemental Agreement and thereby extended the MOA's effectivity for one year from April 27, 2013 to April 27, 2014, the issue had become moot and academic given that the one-year extension had already lapsed. SMI moved for reconsideration, but the CA denied it in its Resolution dated October 9, 2014.

• Failure to File a Motion for Reconsideration: SMI insisted that the certiorari petition filed by the respondents before the CA should have been dismissed outright for their failure to file the required motion for reconsideration, contending that the case did not fall under any of the recognized exceptions because (a) the issue raised was not purely legal since respondents raised several factual matters not yet decided on the merits by the RTC; (b) only SMI's private mining interest, and no public interest, was involved; (c) the need for urgency was only on the part of SMI, which stood to suffer grave and irreparable injury; and (d) the issues raised in the certiorari petition had not yet been passed upon by the RTC since the case before the trial court had yet to be decided on the merits.
• Consummated Act / Mootness: SMI argued that the certiorari petition should not have been entertained since there was nothing left to enjoin. The challenged writ of preliminary injunction covered three matters — the prevention of SMI's mining operations, the performance by SMI of its rights under the MOA and the MPSA, and the issuance by the MGB of OTPs and MOEPs in its favor. As to the first two directives, the propriety was still being litigated before the trial court, so the status quo must be observed and the CA should not have restrained their implementation. As to the third directive, SMI contended that the respondents had no right to withhold the issuance of OTPs and MOEPs on the ground that its MOA had already expired, because at the time the petition was pending before the CA the MOA was still valid and existing by virtue of the Supplemental Agreement extending its effectivity until April 8, 2014; and since the MGB had already issued three OTPs in its favor on September 6, 2013 in compliance with the writ issued by the RTC, there was nothing left for the CA to enjoin, rendering the petition moot and academic.
• Scope of Certiorari Jurisdiction: SMI maintained that the CA, in the exercise of its certiorari jurisdiction, was confined only to determining whether the trial court gravely abused its discretion in the exercise of its judgment, and had no authority to pass upon the merits of the case and rule upon factual matters involved in the main controversy. In particular, the CA erred when it ruled that SMI's right to conduct mining operations had already expired on April 27, 2013, since that issue required the establishment of facts and presentation of evidence which must be left to the proper determination of the trial court.

• Exceptions to the Motion for Reconsideration Requirement: The respondents countered that the rule requiring a prior motion for reconsideration before a petition for certiorari may be filed is not ironclad but is subject to a number of exceptions obtaining in the case. From the tenor of the RTC's Order itself, a motion for reconsideration would have been useless as there was an urgent necessity for the resolution of the question and any further delay would prejudice the interest of the government, because at that time nickel ore worth millions of dollars per shipment would be exported without the requisite permit. The extreme urgency of the situation and the public interest involved necessitated that the matter be brought immediately to the attention of the CA. Moreover, the RTC's Order was a patent nullity as it had no basis to enjoin the respondents from suspending SMI's mining operations through the questioned TRO and writ of preliminary injunction, inasmuch as SMI had no valid or existing right to continue its mining operations under the MOA which had already expired on April 27, 2013.
• Mootness: The respondents claimed that the case had already become moot and academic since SMI no longer conducted mining operations in the contract area for the reason that its contract had long expired, and that for reason of mootness the Court ought to abstain from taking cognizance of the case where no legal relief was needed or called for.
• Propriety of the CA's Ruling on SMI's Right: The respondents averred that the CA did not err when it passed upon SMI's right to conduct mining operations in the exercise of its limited certiorari jurisdiction, given that the respondents, in their petition before it, specifically asked the CA to rule on the matter. Moreover, when the trial court issued the questioned writ of preliminary injunction, it made a factual finding that the MOA between Pacific Nickel and SMI was valid until April 2014; thus it became necessary and indubitable for the CA to look into the same factual matter to determine if the trial court committed grave abuse of discretion in issuing the said writ. Since SMI had no valid and existing right to continue its mining operations under the subject MPSA, the trial court had no basis to enjoin the respondents from suspending SMI's mining operations by issuing the questioned TRO and writ of preliminary injunction, and the CA correctly held that the RTC acted arbitrarily and whimsically in issuing the same.

• Motion for Reconsideration: Whether the respondents' certiorari petition filed with the Court of Appeals should have been dismissed outright for the respondents' failure to file a motion for reconsideration in the case a quo.
• Consummated Act / Mootness: Whether the respondents' certiorari petition filed with the Court of Appeals should have been dismissed outright as the act sought to be enjoined had already been consummated.
• Grave Abuse of Discretion / Scope of Certiorari: Whether there was an error of jurisdiction that may have been correctible by the Court of Appeals through its limited certiorari jurisdiction.

• Motion for Reconsideration: No. The requirement of a prior motion for reconsideration admits well-defined exceptions, and the respondents' case falls under the exceptions of urgent necessity and public interest, since any delay would have facilitated the continued dissipation of the State's mineral resources.
• Consummated Act / Mootness: No. The issuance of OTPs and MOEPs is a continuing process for as long as the underlying mining agreement remains in force, and the crux issue is not rendered moot by the prior issuance of permits, which may still be repeated if not enjoined.
• Grave Abuse of Discretion / Scope of Certiorari: No. The RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in granting the writ of preliminary injunction, the petitioner having had no right in esse at the time it sought injunctive relief.

• Motion for Reconsideration: Generally, a motion for reconsideration is a condition sine qua non for the filing of a petition for certiorari, the purpose being to grant the court or agency an opportunity to correct any actual or perceived error attributed to it by re-examining the legal and factual circumstances of the case without the intervention of a higher court. However, the requirement is not an ironclad rule and admits well-defined exceptions: (a) where the order is a patent nullity, as where the court a quo has no jurisdiction; (b) where the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court; (c) where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable; (d) where, under the circumstances, a motion for reconsideration would be useless; (e) where petitioner was deprived of due process and there is extreme urgency for relief; (f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable; (g) where the proceedings in the lower court are a nullity for lack of due process; (h) where the proceedings were ex-parte or in which the petitioner had no opportunity to object; and (i) where the issue raised is one purely of law or where public interest is involved. It is virtually impossible for the State to retrieve mineral resources without incurring insurmountable costs once they have been shipped out to third persons or exported to other countries; filing a motion for reconsideration against the RTC's Decision would therefore have been a waste of time and would definitely have prejudiced the interest of the Government. The pendency of a motion for reconsideration's resolution would have facilitated or bought SMI time to continue shipping out precious minerals to third persons and even out of the country, and there would have been a continued dissipation of the State's mineral resources had the CA acceded to the RTC's patently void act of practically forcing the respondents to issue OTPs and MOEPs. The assailed CA Decision was thus upheld because there was an urgent need to prevent SMI from facilitating the dissipation of the State's mineral resources.
• Consummated Act / Mootness: The issuance of OTPs and MOEPs on the MGB's part is a continuing process for as long as the mining agreement under which these permits have been issued is still in force and effect. Since the same process of issuance is continuing, the issuance of several OTPs and MOEPs does not render the crux issue of the case moot and academic, for the same act of issuance may still be repeated if not enjoined. The Court found it more compelling to uphold the respondents' act of suspending the issuance of OTPs and MOEPs because SMI's April 27, 2009 MOA with Pacific Nickel had already expired as early as April 27, 2013. Besides, the real status quo in the case is not the respondents' act of continually issuing OTPs and MOEPs, but the preservation of the State's mineral resources. Status quo is defined as the last actual peaceful uncontested situation that precedes a controversy, and its preservation is the office of an injunctive writ; in the context of mineral exploration and extraction, the event considered as the last actual peaceful uncontested situation preceding the controversy is the unexplored and unextracted state of the mineral resources involved, not the continued exploration, extraction, transportation, and exportation of mineral resources out of the country and out of the State's dominion and control. Consistent with the Regalian Doctrine, all unexplored or unextracted mineral resources belong to every Filipino as declared by the Constitution, and the determination of what is in the interest of the public is necessarily vested in the State as owner of all mineral resources.
• Grave Abuse of Discretion / Scope of Certiorari: A petition for certiorari against a court which has jurisdiction over a case will prosper only if grave abuse of discretion is manifested, and only if grave abuse of discretion is alleged and proved to exist; mere abuse of discretion is not enough, it must be grave. Grave abuse of discretion is defined as a capricious or whimsical exercise of judgment that is patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law; in some rare instances the term refers to cases in which there has been a gross misapprehension of facts, but only for the limited purpose of establishing the allegation of grave abuse of discretion. A writ of preliminary injunction is a provisional remedy adjunct to a main suit, as well as a preservative remedy issued to maintain the status quo of the things subject of the action or the relations between the parties during the pendency of the suit, and its purpose is to prevent actual or threatened acts until the merits of the case can be heard. Jurisprudence has established that the following requisites must be proven before a writ of preliminary injunction, whether mandatory or prohibitory, may be issued: (a) the applicant must have a clear and unmistakable right to be protected, that is a right in esse; (b) there is a material and substantial invasion of such right; (c) there is an urgent need for the writ to prevent irreparable injury to the applicant; and (d) no other ordinary, speedy, and adequate remedy exists to prevent the infliction of irreparable injury. In this case, SMI had no more right in esse to speak of when it filed its complaint with prayer for the issuance of an injunction on May 25, 2013, because the April 27, 2009 MOA had already expired as early as April 27, 2013; at the time of seeking an injunction, the MOA had already expired and SMI had no more right to perform any act agreed or even contemplated in such agreement. The supposed issue of the MOA's expiration need not reach the trial stage as it had been conclusively resolved and established by the evidence offered during the hearing for the issuance of the writ of preliminary injunction; to replicate the same evidence during trial would be to cause needless delays and contribute to the clogging of court dockets. As regards SMI's claim that the December 20, 2010 registration of its Supplemental Agreement seeking the extension of the MOA was "deemed approved" by the respondents, the Court rejected the contention as the mere act of registration is not tantamount to approval. Section 29 of the Philippine Mining Act of 1995 relative to the filing and approval of mineral agreements provides that all proposed mineral agreements shall be filed in the region where the areas of interest are located, except in mineral reservations which shall be filed with the Bureau; the filing of a proposal for a mineral agreement shall give the proponent the prior right to areas covered by the same; and the proposed mineral agreement will be approved by the Secretary, with copies submitted to the President, who shall thereafter provide a list to Congress of every approved mineral agreement within thirty (30) days from its approval by the Secretary. The registration referred to by SMI refers to the mere receipt of its Supplemental Agreement by the MGB's regional office; it does not amount to approval, for the law labels these mineral agreements as mere proposals which will still be approved by the DENR Secretary after a thorough evaluation of the terms and conditions contained therein and after an exhaustive determination that the stipulations not only comply with all laws and regulations but also do not cause undue injury on the part of the Government. SMI's Supplemental Agreement therefore cannot be considered to have an operative effect, as the records do not show that the DENR Secretary had approved the same. The CA correctly found grave abuse of discretion on the RTC's part when it ignored the fact of the MOA's expiration as well as the well-established Regalian Doctrine in granting SMI's application for injunction. Finally, mining contracts are not wholly immune to State regulation by virtue of the State's police power. Although Section 10, Article III of the present Constitution prohibits Congress from enacting laws that impair the obligation of contracts, such provision is limited by the exercise of the police power of the State in the interest of public health, safety, morals, and general welfare. Police power is the most pervasive, the least limitable, and the most demanding of the three fundamental powers of the State. Since mineral production sharing agreements as well as their offshoots partake of the nature of both a permit and a contract, they may be validly regulated by virtue of the State's police power. Mineral resources are part of national wealth and patrimony, and any issue involving the exploration, development, utilization, and disposition of mineral resources is imbued with public interest. The CA thus correctly nullified the RTC's Order and the writ of preliminary injunction it issued, because the respondents have the primary authority to protect the State's interest by strictly regulating the conduct relative to exploration, development, utilization, and disposition of mineral resources.

• Regalian Doctrine — All lands of the public domain belong to the State, and any asserted right of ownership over land necessarily traces back to the State; in the context of mining, all minerals and mineral lands are owned by the State unless private persons or entities hold mining patents issued pursuant to the Philippine Bill of 1902 and existing prior to November 15, 1935. The State may enter into co-production, joint venture, or production-sharing agreements with Filipino citizens, or corporations or associations at least 60 per centum of whose capital is owned by such citizens, for the exploration, development, and utilization of mineral resources. The Court applied the doctrine to hold that the determination of what is in the interest of the public is vested in the State as owner of all mineral resources, and that issues regarding the exploration, extraction, and utilization of mineral resources are imbued with public interest, justifying a strict interpretation in favor of preserving possession of mineral resources in favor of the State and in trust for its citizens pending controversies.
• Two-fold Nature of Mineral Agreements — Mineral agreements entered into by the State with private persons and entities partake of two natures: (a) a permit — as the State is the owner of mineral resources as declared by the 1987 Constitution, all authority for their exploration, development, and utilization emanates from it; and (b) a contract — as the fruits of the production agreement are shared by the State and the private person or entity permitted or allowed to undertake exploration and extraction activities. Because of this dual nature, mineral production sharing agreements and their offshoots may be validly regulated by virtue of the State's police power.
• Requisites of a Writ of Preliminary Injunction — Before a writ of preliminary injunction, whether mandatory or prohibitory, may be issued, the following requisites must be proven: (a) the applicant must have a clear and unmistakable right to be protected, that is, a right in esse; (b) there is a material and substantial invasion of such right; (c) there is an urgent need for the writ to prevent irreparable injury to the applicant; and (d) no other ordinary, speedy, and adequate remedy exists to prevent the infliction of irreparable injury. The Court found the first requisite absent because SMI's MOA had already expired when it sought injunctive relief.
• Grave Abuse of Discretion — Defined as a capricious or whimsical exercise of judgment that is patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law; in some rare instances, the term refers to cases in which there has been a gross misapprehension of facts, but only for the limited purpose of establishing the allegation of grave abuse of discretion. A petition for certiorari against a court that has jurisdiction over a case will prosper only if grave abuse of discretion is manifested, alleged, and proved; mere abuse of discretion is not enough.
• Exceptions to the Motion for Reconsideration Requirement — The requirement of filing a motion for reconsideration as a condition sine qua non for a petition for certiorari admits well-defined exceptions: (a) where the order is a patent nullity, as where the court a quo has no jurisdiction; (b) where the questions raised in the certiorari proceedings have been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court; (c) where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests of the Government or of the petitioner or the subject matter of the action is perishable; (d) where, under the circumstances, a motion for reconsideration would be useless; (e) where petitioner was deprived of due process and there is extreme urgency for relief; (f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the trial court is improbable; (g) where the proceedings in the lower court are a nullity for lack of due process; (h) where the proceedings were ex-parte or in which the petitioner had no opportunity to object; and (i) where the issue raised is one purely of law or where public interest is involved. The Court applied exceptions (c) and (i), finding urgent necessity and public interest given the irremediable loss of mineral resources once shipped or exported.
• Status Quo in Mineral Resource Controversies — Status quo is defined as the last actual peaceful uncontested situation that precedes a controversy, and its preservation is the office of an injunctive writ. In the context of mineral exploration and extraction, the event considered as the last actual peaceful uncontested situation preceding the controversy is the unexplored and unextracted state of the mineral resources involved, not the continued exploration, extraction, transportation, and exportation of mineral resources out of the country and out of the State's dominion and control.
• Registration Is Not Approval — Under Section 29 of the Philippine Mining Act of 1995, the filing of a proposal for a mineral agreement gives the proponent a prior right to the areas covered, but the proposed mineral agreement will still be approved by the DENR Secretary, with copies submitted to the President, who shall provide a list to Congress within thirty (30) days from approval. Registration with the MGB regional office is a mere receipt of the Supplemental Agreement and does not amount to approval; the agreement cannot be considered to have operative effect absent a showing that the DENR Secretary approved the same.
• Police Power Over Mining Contracts — Although Section 10, Article III of the 1987 Constitution prohibits Congress from enacting laws that impair the obligation of contracts, such provision is limited by the exercise of the police power of the State in the interest of public health, safety, morals, and general welfare. Police power is the most pervasive, the least limitable, and the most demanding of the three fundamental powers of the State. Mining contracts, partaking of the nature of both a permit and a contract, are not wholly immune to State regulation by virtue of police power.

• "Grave abuse of discretion" as a "capricious or whimsical exercise of judgment that is patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law." — This passage states the canonical formulation of grave abuse of discretion, the threshold standard for a Rule 65 certiorari petition, which the Court applied in finding that the RTC's issuance of the writ of preliminary injunction warranted correction by the CA.
• "The registration referred to by the petitioner refers to the mere receipt of its Supplemental Agreement by the MGB's regional office. It does not amount to 'approval' for the law labels these mineral agreements as mere 'proposals' which 'will [still] be approved by the [DENR] Secretary' after a thorough evaluation of the terms and conditions contained therein and after an exhaustive determination that the stipulations not only comply with all laws and regulations but also do not cause undue injury on the part of the Government." — This passage rejects SMI's contention that the registration of its Supplemental Agreement operated as approval, and clarifies that under Section 29 of the Philippine Mining Act of 1995, mineral agreements remain mere proposals until approved by the DENR Secretary.
• "And in the context of mineral exploration and extraction, the event which is considered as 'the last actual peaceful uncontested situation preceding the controversy' is the unexplored and unextracted state of the mineral resources involved in this dispute, not the continued exploration, extraction, transportation and exportation of mineral resources out of the country and out of the State's dominion and control." — This passage redefines the status quo for purposes of injunctive relief in mineral resource controversies, anchoring the rule in the Regalian Doctrine and the State's ownership of mineral resources in trust for the Filipino people.
• "Thus, from the foregoing precept, it logically follows that the mineral agreements entered into by the State with private persons and entities partake of two natures: (a) a permit—as the State is the owner of mineral resources as declared by the 1987 Constitution, all authority for its exploration, development and utilization emanate from it; and (b) a contract—as the fruits of the production agreement are being shared by the State and the private person or entity permitted or allowed to undertake exploration and extraction activities." — This passage articulates the two-fold nature of mineral agreements, which serves as the doctrinal basis for holding that mining contracts are subject to State regulation under police power.

• Republic vs. Heirs of Meynardo Cabrera, G.R. No. 218418, November 8, 2017 — Cited as authority for the proposition that the Regalian Doctrine has been consistently adopted under the 1935, 1973, and 1987 Constitutions and that any asserted right of ownership over land necessarily traces back to the State.
• Yinlu Bicol Mining Corporation vs. Trans-Asia Oil and Energy Development Corporation, 750 Phil. 148, 166-168 (2015) — Cited for the rule that all minerals and mineral lands are owned by the State unless private persons or entities hold mining patents issued pursuant to the Philippine Bill of 1902 and existing prior to November 15, 1935.
• Bicol Medical Center vs. Botor, G.R. No. 214073, October 4, 2017, 842 SCRA 143, 160 — Cited as authority for the four requisites of a writ of preliminary injunction, whether mandatory or prohibitory.
• Lukang vs. Pagbilao Development Corporation, 728 Phil. 608, 617 (2014) — Cited for the definition of a writ of preliminary injunction as a provisional remedy adjunct to a main suit and a preservative remedy issued to maintain the status quo.
• Los Baños Rural Bank, Inc. vs. Africa, 433 Phil. 930, 945 (2002) — Cited for the definition of status quo as the last actual peaceful uncontested situation that precedes a controversy.
• Republic vs. Rosemoor Mining and Development Corporation, 470 Phil. 363, 382-383 (2004) — Cited for the principle that the determination of what is in the interest of the public is necessarily vested in the State as owner of all mineral resources.
• Bucal vs. Bucal, 760 Phil. 912, 920 (2015) — Cited for the enumeration of the exceptions to the rule requiring a motion for reconsideration before the filing of a petition for certiorari.
• Spouses Davis vs. Spouses Davis, G.R. No. 233489, March 7, 2018 — Cited for the rule that the requirement of filing a motion for reconsideration for a petition for certiorari to prosper is not an ironclad rule as it admits well-defined exceptions.
• Social Weather Stations, Inc. vs. Commission on Elections, 757 Phil. 483, 526 (2015) — Cited for the rule that the prohibition against the impairment of the obligation of contracts under Section 10, Article III of the 1987 Constitution is limited by the exercise of the police power of the State.
• Southern Luzon Drug Corporation vs. The Department of Social Welfare and Development, 809 Phil. 315, 340 (2017), citing Gerochi vs. Department of Energy, 554 Phil. 563 (2007) — Cited for the proposition that police power is the most pervasive, the least limitable, and the most demanding of the three fundamental powers of the State.

• Section 2, Article XII, 1987 Constitution — Declares that all lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State, and that the exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. The Court invoked this provision as the constitutional basis of the Regalian Doctrine and of the State's authority to enter into co-production, joint venture, or production-sharing agreements with qualified Filipino citizens or corporations.
• Section 29, Republic Act No. 7942 (Philippine Mining Act of 1995) — Provides that all proposed mineral agreements shall be filed in the region where the areas of interest are located, except in mineral reservations which shall be filed with the Bureau; that the filing of a proposal for a mineral agreement shall give the proponent a prior right to areas covered by the same; and that the proposed mineral agreement will be approved by the Secretary, with copies submitted to the President, who shall thereafter provide a list to Congress of every approved mineral agreement within thirty (30) days from its approval by the Secretary. The Court applied this provision to hold that the registration of SMI's Supplemental Agreement with the MGB regional office did not amount to approval, since the agreement remained a mere proposal until approved by the DENR Secretary.
• Section 10, Article III, 1987 Constitution — Provides that no law impairing the obligation of contracts shall be passed. The Court cited this provision to acknowledge the constitutional guarantee while holding that it is limited by the exercise of the police power of the State in the interest of public health, safety, morals, and general welfare, thereby permitting State regulation of mining contracts.
• Section 3, Rule 58, Revised Rules of Civil Procedure — Enumerated by the RTC in its June 14, 2013 Order as the basis for the requisites of a writ of preliminary injunction: (1) the applicant must have a clear and unmistakable right, that is, a right in esse; (2) there is a material and substantial invasion of such right; (3) there is an urgent need for the writ to prevent irreparable injury to the applicant; and no other ordinary, speedy, and adequate remedy exists to prevent the infliction of irreparable injury. The Court adopted the same requisites in its analysis and found the first requisite absent.
• DENR Memorandum Order No. 2004-09 — Provides in part that "Operating Agreement...shall be subject to the approval of the MGB Director." The Court referenced this issuance in the context of the July 23, 2009 Order approving SMI's conduct of activities under the MOA, which the MGB later declared no longer in force and effect upon the MOA's expiration.
• DENR Department Administrative Order No. 96-40 — Referenced as the regulation with which the MPSA was made to conform through the Amended and Restated Definitive Agreement (ARDA) executed on August 7, 1997.
• Department Memorandum Circular No. 2010-07 and Section 4 of DMO No. 2004-09 — Cited by the MGB Central Office in its June 26, 2013 letter as the basis for holding in abeyance SMI's OTP and MOEP applications pending proof of approval of the September 29, 2009 Supplemental Agreement.

Carpio, Senior Associate Justice (Chairperson), Caguioa, Lazaro-Javier, and Zalameda, JJ., concur.