G.R. No. 188952 , September 21, 2016
PEÑAFRANCIA SHIPPING CORPORATION AND SANTA CLARA SHIPPING CORPORATION, PETITIONERS, VS. 168 SHIPPING LINES, INC., RESPONDENT.

FACTS

Respondent 168 Shipping Lines, Inc. applied with the Maritime Industry Authority (MARINA) Regional Office V for a Certificate of Public Convenience (CPC) to operate a vessel on the Matnog-Allen route. Petitioners Peñafrancia Shipping Corporation and Santa Clara Shipping Corporation, existing operators on the same route, intervened and opposed the application on grounds including failure to submit a required Certificate of Berthing, an impossible proposed schedule, and overtonnage. The MARINA Regional Office denied the application. Respondent appealed to the MARINA Administrator, who reversed the denial and granted the CPC. Petitioners’ motion for reconsideration was denied by the MARINA Officer-in-Charge, who was concurrently a DOTC Undersecretary.
Petitioners then filed a petition for review directly with the Court of Appeals under Rule 43 of the Rules of Court. The CA dismissed the petition, holding that petitioners failed to exhaust administrative remedies. The CA ruled that MARINA is an agency attached to the Department of Transportation and Communications (DOTC), and thus, the MARINA Administrator’s decision should have been appealed first to the DOTC Secretary and then to the Office of the President before resorting to judicial review.

ISSUE

Whether petitioners correctly filed a petition for review directly with the Court of Appeals under Rule 43, or whether they were required to first appeal the MARINA decision to the DOTC Secretary and the Office of the President.

RULING

The Supreme Court ruled that the CA erred in dismissing the petition. Petitioners correctly availed themselves of a direct appeal to the CA via Rule 43. The doctrine of exhaustion of administrative remedies was inapplicable. The legal logic is anchored on the nature of MARINA’s adjudicatory function and the applicable procedural framework.
First, the Court clarified that MARINA, in deciding CPC applications, acts as a quasi-judicial agency. Its decisions in such contested matters are final and executory, subject only to judicial review. This is explicitly provided under Section 10(e) of Republic Act No. 9295 and its Implementing Rules and Regulations (IRR), which state that any order, ruling, decision, or resolution of the MARINA Board or the MARINA Administrator on CPC matters may be appealed to the CA via a petition for review under Rule 43. The law provides a specific mode of appeal, which supplants the general rule on exhaustion under the Administrative Code.
Second, the Court distinguished between an agency’s quasi-judicial functions and its administrative or policy-making functions. The doctrine of exhaustion applies to decisions made in the exercise of administrative functions, where review by higher executive authorities is intended. However, when an agency like MARINA renders a decision in the exercise of its quasi-judicial or adjudicatory powers, as in this contested CPC proceeding, the decision is final within the executive department. The aggrieved party’s remedy is judicial review, not a further administrative appeal. The MARINA Administrator’s decision in this case was a final quasi-judicial determination, not a mere recommendation subject to DOTC or OP approval.
Consequently, petitioners were not required to appeal to the DOTC Secretary or the Office of the President. Their direct recourse to the CA via Rule 43 was proper. The case was remanded to the CA for substantive proceedings on the merits of the petition.