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Subic Telecom v.

SBMA (Short title) competition with Subic Telecom and among the CPCN applicants was
GR # 185159 | October 12, 2009 Innove Communications, Inc. (Innove).
Petition: Petition for Review on Certiorari under Rule 45 against CA o Subic Telecom opposed said application.
Petitioner: Subic Telecommunications Company, Inc. - Pending the issuance by the OGCC of an opinion, SBMA issued a resolution
Respondent: Subic Bay Metropolitan Authority and Innove Communications, Inc. stating that as a matter of policy, it encourages competition.
(Rule 2, Rules on Civil Procedure) o Since its notice of renewal had yet to be acted upon, Subic Telecom
sought clarification of the resolution, requesting in the process a
DOCTRINE copy of the minutes of the SBMA Board meeting when said
Litis pendentia is predicated on the principle that a party should not be allowed to vex resolution was supposedly set and issued but SBMA sat on the
another more than once regarding the same subject matter and for the same cause of request.
action. This principle in turn is founded on the public policy that the same subject - Subsequently, OGCC issued its opinion holding that the exclusivity clause or
matter should not be the subject of controversy in courts more than once, in order that the restrictions on competition embodied in the JVA cover different subject
possible conflicting judgments may be avoided for the sake of the stability of the matters and that the JVA only referred to the exclusivity pertaining to a direct
rights and status of persons and also to avoid the costs and expenses incident to competition posed by SBMA itself, and not by other telecommunications
numerous suits. companies, noting that the exclusivity scheme did not include the option to
renew.
FACTS - SBMA proceeded with the rejection of Subic Telecoms notice to renew and
- Subic Bay Metropolitan Authority (SBMA) was created by Congress, to at the same time entertained applications for CPCN of other
develop the Subic Bay Freeport Zone (SBFZ) as a self-sustaining industrial, telecommunications industry players.
commercial, financial, and investment center and one of the the projects was o SBMA issued a Department Order proposing a liberalized policy for
the upgrading of the antiquated telephone system the US Navy previously the telecommunications sector in the SBFZ, followed by the
established. issuance of the necessary liberalization guidelines.
- After winning the bidding to provide telecommunications services in the - SBMA then ratified and the decision not to grant Subic Telecoms option to
SBFZ, PLDT and AT&T entered into a 25-year renewable Joint Venture renew its exclusivity privilege and issued an order granting Innove
Agreement (JVA) with the SBMA to provide telecommunications and related provisional authority to operate in the SBFZ for a period of 18 months in
services in the zone and this led to the incorporation of Subic Telecom. virtual competition with Subic Telecom.
- A resolution of SBMA granted Subic Telecom a franchise to provide - Subic Telecom moved for reconsideration but again, SBMA failed to act
telecommunications services and establish, operate, and maintain prompting Subic Telecom to withdraw its motion and file a Complaint for
telecommunications facilities, networks, and systems in the SBFZ. Specific Performance (With Prayer for Temporary Restraining Order and
- The joint venture partners agreed that, for a period of 10 years, SBMA would Preliminary Injunction) against SMBA and Innove before the RTC in
not allow third parties to engage in any activity related to the project and that Olongapo City.
Subic Telecom has the option to renew its exclusivity privilege for three (3) o Subic Telecomprayed that: (a) its notices of renewal of its
five-year periods subject to the continuing compliance by Subic Telecom of exclusivity privilege be declared as a valid exercise of its option and
its obligations and provided that neither PLDT nor AT&T defaults. effective for five years from June 30, 2004 to June 29, 2009; and
- Due to the 1997 Asian financial crisis, Subic Telecom failed to recover its (b) SBMA be ordered to comply with its contractual obligations
investments during the initial exclusivity period. under the JVA and be enjoined from violating Subic Telecoms rights
- SBMA, in 1999, then sold its equity interest in Subic Telecom to PLDT and in the JVA.
AT&T likewise followed suit resulting to Subic Telecom being a wholly-owned - RTC: Dismissed the complaint of Subic Telecom on the ground of litis
subsidiary of PLDT. pendentia.
- Shortly before the end of the 10-year period exclusivity period, Subic - CA: Denied the appeal and effectively affirmed the dismissal by the RTC of
Telecom notified SBMA that it is exercising its option to renew its exclusivity Subic Telecoms complaint on the same ground relied upon by the latter
privilege for a period of five years but received no response from SBMA court.
- Subic Telecom and SBMA then held a bilateral meeting which saw an
exchange of memoranda, with Subic Telecom arguing and defending its right Hence, this petition.
to the desired renewal.
- SBMA subsequently informed Subic Telecom of its intention to secure the ISSUE/S
opinion of the Office of the Government Corporate Counsel (OGCC) 1. W/N there exists a litis pendentia
regarding the matter of extension. 2. W/N CA departed from the accepted and usual course of proceedings when it
- Meanwhile, SBMA started accepting applications for Certificate of Public refused to take cognizance of arguments in support of the prayer for injunction.
Convenience and Necessity (CPCN) to operate in the SBFZ international,
and leased lines services as well as local exchange and toll services in direct
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PROVISIONS denied while in the second case, its notices of renewal have already been
denied, prompting it to file a suit for specific performance that entailed a
Rule 2 determination by the RTC of the rights of the parties. It is clear that there is,
as between the two actions, no identity of rights asserted and reliefs prayed
Section 3. One suit for a single cause of action. A party may not institute more than for; and the facts whence the reliefs are sought are different.
one suit for a single cause of action. 2. NO
- It is inappropriate for the Court to favorably act on the plea, absent a clear-
Section 4. Splitting a single cause of action; effect of. If two or more suits are cut determination of the right in esse of Subic Telecom, a material and
instituted on the basis of the same cause of action, the filing of one or a judgment substantial evasion of such right, and the prevention of irreparable injury, if
upon the merits in any one is available as a ground for the dismissal of the others. any.
(4a) - The RTC and the CA no longer saw fit to delve into the asserted right issue
which to them was rendered moot by their finding, erroneous as it turned out,
RULING & RATIO on the existence of litis pendentia. Thus, we cannot make yet a judicious
1. NO disposition as to the propriety of an injunction, given for one the dearth of
- Litis pendentia as a ground for the dismissal of a civil action contemplates a evidence on record.
situation wherein another action is pending between the same parties for the - The remand of the case to the RTC is in order, allowing Subic Telecom to
same cause of action, such that the second action becomes unnecessary substantiate its assertions on the existence of its rights and the alleged
and vexatious.I t is one of the grounds that authorizes a court to dismiss a breach by SBMA of its obligations, and for respondents SBMA and Innove, if
case motu proprio. so minded, to contest them.
- For litis pendentia to exist, the following requisites must concur: (a) identity - The Court has time and again reiterated that it is not a trier of fact or
of parties (b) identity of rights asserted and relief prayed for founded on the otherwise structurally capacitated to receive and evaluate evidence.
same facts; and (c) identity with respect to the two (2) preceding particulars DISPOSITION
in the two (2) cases is such that any judgment that may be rendered in the WHEREFORE, the petition is hereby GRANTED. Accordingly, the CAs April 4, 2008
pending case, regardless of which party is successful, would amount to res Decision and October 28, 2008 Resolution in CA-G.R. CV No. 88757 that affirmed the
judicata in the other case. RTCs Orders dated June 30, 2006 and August 24, 2006 are hereby REVERSED and
- Both cases, insofar as Subic Telecoms defense in the first case and cause of SET ASIDE. The RTC, Branch 74 in Olongapo City is hereby ordered to continue with
action in the second case are concerned, touch and deal with the the proceedings of Civil Case No. 155-O-2006 and resolve it with dispatch. No costs.
interpretation of the pertinent JVA provisions but both are not based on the
same set of controlling facts, for when Subic Telecom opposed Innoves
application, its notices of renewal to SBMA have not yet been rejected or

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