G.R. No. 156264 ; September 30, 2004
Allied Domecq Phil., Inc., petitioner, vs. Hon. Sesinando E. Villon of the Regional Trial Court of Manila, Branch 23; Clark Liberty Warehouse, Inc., Bureau of Customs and/or District Collectors of Customs, Port of Manila and Clark Special Economic Zone, and Bureau of Food and Drugs (BFAD) and/or Director of BFAD, respondents.

FACTS

Petitioner Allied Domecq Philippines, Inc. (ADPI) held an exclusive distributorship agreement for “Fundador” brandy. Respondent Clark Liberty Warehouse, Inc., a duty-free shop in the Clark Special Economic Zone (CSEZ), imported “Fundador” brandy. The Bureau of Customs seized the shipment because Clark Liberty lacked the required BFAD Certificate of Product Registration. ADPI filed a motion to intervene in the seizure proceedings, which was not resolved. Subsequently, ADPI filed a complaint for injunction and damages with the Regional Trial Court (RTC) of Manila to restrain Clark Liberty from importing and selling the brandy, alleging unfair competition. The RTC denied the application for a writ of preliminary injunction, finding no proof of deceit or bad faith by Clark Liberty.

ISSUE

Whether the Court of Appeals correctly dismissed ADPI’s special civil action for certiorari for lack of jurisdiction, based on the exclusive authority of the Supreme Court to issue injunctive reliefs involving projects within the Clark Special Economic Zone.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ dismissal. The legal logic centers on the interpretation of Republic Act No. 7227 , the Bases Conversion and Development Act of 1992. Section 21 of R.A. No. 7227 explicitly states: “The implementation of the projects for the conversion into alternative productive uses of the military reservations are urgent and necessary and shall not be restrained or enjoined except by an order issued by the Supreme Court of the Philippines.” The Court ruled that Clark Liberty, as a duly licensed duty-free enterprise operating within the CSEZ, is a juridical creation and an integral part of the conversion project envisioned by the law. Therefore, any legal action seeking to enjoin its operations—including ADPI’s suit for injunction which ultimately aimed to stop Clark Liberty’s importation activities—falls under the exclusive jurisdiction of the Supreme Court for the issuance of any restraining order or injunction. The Court of Appeals correctly declined jurisdiction, as the RTC’s earlier denial of injunctive relief was an interlocutory order, and the substantive issue of enjoining a CSEZ project is governed by the special rule in Section 21. The merits of the unfair competition claim were not reached due to this jurisdictional barrier.