May 2011 Philippine Supreme Court Decisions on Commercial Law

Here are selected May 2011 rulings of the Supreme Court of the Philippines on commercial law:

Mining Act; meeting 72 hour requirement via fax. It is clear from Section 8 of DAO 63 that the MGB Central Office processes all FTAA applications after payment of the requisite fees. Section 8 requires the FTAA applicant to furnish the MGB Regional Office a copy of the FTAA application within 72 hours from filing of the FTAA application.

In the present case, the records show that Newmont filed its FTAA applications with the MGB Central Office in Quezon City on 20 December 1994. After Newmont paid the filing and processing fees, the MGB Central Office registered Newmont’s FTAA applications on the same date. On the other hand, Diamond Drilling filed its MPSA application with the MGB-CAR Regional Office in Baguio City on 20 December 1994. However, since the pertinent documents needed by the MGB-CAR Regional Office were lacking, it took two more days for Diamond Drilling to complete the requirements. Diamond Drilling paid its filing and processing fees only on 22 December 1994 or two days after Newmont’s FTAA applications were registered with the MGB Central Office. Thus, Diamond Drilling’s MPSA application was registered by the MGB-CAR Regional Office only on 22 December 1994.

Since Newmont’s FTAA applications preceded that of Diamond Drilling’s MPSA application, priority should be given to Newmont. Section 8 of DAO 63 is clear. It states that in the event there are two or more applicants over the same area, priority shall be given to the applicant that first filed its application.

Newmont in fact furnished the MGB-CAR Regional Office with copies of its FTAA applications, through fax transmission, within 72 hours from filing of the FTAA applications. Considering the distance between Quezon City and Baguio City where the MGB-CAR Regional Office is located, and the requirement to furnish the proper Regional Office (some of which are located in Visayas and Mindanao) a copy of the FTAA application within a short period of 72 hours, a fax machine copy is a reasonable and sufficient mode of serving a copy of the FTAA application to the proper Regional Office.  Section 8 of DAO 63 does not specify how a copy of the FTAA application should be furnished to the proper Regional Office.

Being the first to file its FTAA applications ahead of Diamond Drilling’s MPSA application, and having furnished copies of its FTAA applications to the MGB-CAR Regional Office within 72 hours from filing, Newmont must be given preferential right to utilize the area included in its FTAA applications.  Diamond Drilling Corporation of the Philippines v. Newmont Philippines, Inc., G.R. No. 183576, May 30, 2011.

(Note: as of the date of this post, the Supreme Court website has not yet published the May 2011 cases except for May 30 and May 31 cases.  This post will be updated after the other May 2011 cases become available.)

(Hector thanks Mowie Sison for his assistance to Lexoterica.)

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