G.R. No. 187420 . August 09, 2017.
POWER GENERATION EMPLOYEES ASSOCIATION-NPC, ET AL., PETITIONERS, VS. NATIONAL POWER CORPORATION AND NATIONAL POWER CORPORATION BOARD OF DIRECTORS, POWER SECTOR ASSETS & LIABILITIES MANAGEMENT AND PSALM BOARD DIRECTORS, RESPONDENTS.

FACTS

Petitioners, the Power Generation Employees Association-NPC and several individual employees, filed a Petition for Injunction under Section 78 of the Electric Power Industry Reform Act (EPIRA). They sought to permanently enjoin the implementation of an Operation and Maintenance Agreement (OMA) jointly executed by the National Power Corporation (NAPOCOR) and the Power Sector Assets and Liabilities Management Corporation (PSALM). Petitioners alleged the OMA was void for contravening EPIRA, arguing it effectively transferred control over NAPOCOR’s operations and revenues from undisposed power assets to PSALM. They contended PSALM’s role under EPIRA is limited to asset privatization and liability management, not the direct operation of power generation assets, which authority remains with NAPOCOR.
The OMA required NAPOCOR to submit its proposed budget to PSALM for approval and to remit all revenues from the assets to PSALM. This agreement was signed in March 2009. Petitioners’ position found support in a prior legal opinion from a congressional author of EPIRA, who opined that PSALM should not interfere with NAPOCOR’s operation of undisposed assets. The petition was filed directly with the Supreme Court, invoking its exclusive jurisdiction under Section 78 of EPIRA to restrain the implementation of any provision of the law.

ISSUE

The primary issue is whether a Petition for Injunction under Section 78 of EPIRA is the proper remedy to challenge and enjoin the implementation of the Operation and Maintenance Agreement between NAPOCOR and PSALM.

RULING

The Supreme Court DISMISSED the petition. The Court held that a petition for injunction under Section 78 of EPIRA is not the correct remedy to assail the implementation of the OMA. The legal logic is clear and twofold. First, the special civil action under Section 78 is strictly limited to restraining or enjoining the implementation of any provision of the EPIRA law itself. The provision states: “The Supreme Court shall have the exclusive jurisdiction to issue a restraining order or injunction to enjoin the implementation of any provision of this Act.” The petitioners’ target was not a provision of EPIRA, but a contractual agreement—the OMA—executed by two corporations. A contract, even if alleged to be in violation of a statute, is not itself a “provision of this Act.” Therefore, the remedy provided by Section 78 is inapplicable.
Second, the Court found that the petitioners lacked a cause of action as they were not the real parties in interest. A cause of action requires a clear legal right of the plaintiff, a correlative obligation of the defendant, and an act or omission by the defendant violating the plaintiff’s right. The petitioners, as an association and employees, failed to demonstrate a direct and personal legal right that was violated by the execution of the OMA between NAPOCOR and PSALM. Their alleged interest was too general and speculative. The proper parties to challenge the contract would be the corporations themselves or their boards, not third parties like the employees’ union. Consequently, the petition was dismissed for being an improper remedy and for petitioners’ lack of legal standing to file it.