G.R. No. 134030 ; April 25, 2006
ASAPHIL CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner, vs. VICENTE TUASON, JR., INDUPLEX, INC. and MINES ADJUDICATION BOARD, Respondents.

FACTS

Respondent Vicente Tuason, Jr., a mining claim owner, entered into a Contract for Sale and Purchase of Perlite Ore with respondent Induplex, Inc. on March 24, 1975. Subsequently, on May 29, 1976, Tuason executed an Agreement to Operate Mining Claims in favor of petitioner Asaphil Construction and Development Corporation. In 1990, Tuason filed a complaint with the Department of Environment and Natural Resources (DENR) seeking the declaration of nullity of both contracts. He alleged that Induplex, through corporate maneuvers and stock acquisitions involving Asaphil and another corporation, violated a prohibition imposed by the Board of Investments, which adversely affected his interests.
The DENR Regional Executive Director dismissed the complaint for lack of jurisdiction, agreeing with Induplex’s argument that the dispute involved a “mineral product” sale and not a mining property conflict between claimholders or operators. On appeal, the Mines Adjudication Board (MAB) reversed the dismissal. The MAB assumed jurisdiction, cancelled the Agreement to Operate Mining Claims for violating the BOI prohibition, but upheld the Contract for Sale and Purchase of Perlite Ore. Asaphil filed the present petition.

ISSUE

Whether the DENR, through the MAB, has jurisdiction over Tuason’s complaint for the declaration of nullity of the subject contracts.

RULING

No, the DENR and the MAB have no jurisdiction. The Supreme Court granted the petition and reinstated the Regional Executive Director’s order of dismissal. The Court ruled that the dispute is essentially judicial, not a mining conflict. Jurisdiction over mining disputes under Presidential Decree No. 1281 is limited to controversies involving rights to mining areas and requires the parties to be claimholders, concessionaires, or operators. While the contracts are mining-related, Tuason’s action fundamentally sought the annulment of contracts based on alleged violations of a BOI condition and corporate manipulations. Citing Gonzales v. Climax Mining Ltd., the Court held that a complaint which puts in issue the very validity of contracts, requiring the determination of their voidness or voidability and the application of civil law, is a legal or judicial question beyond the jurisdiction of quasi-judicial bodies like the MAB. The resolution of such a complaint necessitates the exercise of judicial function by the regular courts. Consequently, the MAB erred in taking cognizance of the appeal and ruling on the contracts’ validity.