G.R. No. 201715; December 11, 2013
Republic of the Philippines, Petitioner, vs. Manila Electric Company (MERALCO), and National Power Corporation (NPC), Respondents.

FACTS

The case originated from a dispute between MERALCO and NPC under their 1994 Contract for the Sale of Electricity (CSE). MERALCO drew less than the minimum contracted energy from 2002 to 2004 and refused to pay the corresponding minimum charges. NPC, in turn, presented a claim for the undrawn energy. The parties entered into mediation, resulting in a 2003 Settlement Agreement wherein MERALCO agreed to pay a net amount to NPC, with a provision allowing MERALCO to recover this from its consumers through a pass-through mechanism. MERALCO later filed a petition for declaratory relief before the Regional Trial Court (RTC), seeking a declaration that the pass-through provision was void and that the entire Settlement Agreement was unenforceable for violating public policy.
During the pre-trial, the Republic, through the Office of the Solicitor General (OSG), sought to intervene, arguing the Settlement Agreement was prejudicial to the public interest. The RTC admitted the intervention but later issued orders declaring the Republic to have waived its right to present evidence and proceeded to pre-trial. The Republic filed a petition for certiorari with the Court of Appeals (CA) to challenge these interlocutory orders. The CA dismissed the petition. Meanwhile, and crucially, the RTC proceeded to render a decision on the main case, declaring the Settlement Agreement valid and binding, except for the pass-through provision which it referred to the Energy Regulatory Commission.

ISSUE

Whether the petition for certiorari assailing the RTC’s interlocutory orders on pre-trial and presentation of evidence had been rendered moot and academic by the RTC’s rendition of a decision on the merits.

RULING

Yes, the petition was rendered moot and academic. The Supreme Court affirmed the CA’s dismissal. The core legal principle applied is that an issue becomes moot when a supervening event, such as the rendition of a final decision on the main action, deprives the court of the ability to provide substantial relief or render a resolution that would have any practical legal effect. The Republic’s certiorari petition sought to nullify the RTC’s interlocutory orders that limited its participation in pre-trial and evidence presentation. However, with the RTC having already decided the declaratory relief case on its merits, any ruling on the propriety of those earlier procedural orders would be an exercise in futility. The decision on the merits superseded the interlocutory stages of the litigation. The proper recourse for the Republic, if aggrieved by the substantive outcome, was to appeal the RTC’s final decision. The Court also declined the Republic’s ancillary plea to compel arbitration, noting that the primary competence to rule on the enforceability of the CSE’s arbitration clause lay with the RTC in the main action, and its decision had preempted that issue.