Port Regulation of Davao
This petition for review with prayer for a writ of preliminary injunction and/or restraining order filed by petitioners, Philippine Ports Authority ("PPA" for brevity), Port Manager Bienvenido Basco and the Port District Manager, Ernesto Fernando of Davao City, challenges the jurisdiction of the Regional Trial Court of Davao City, Branch 17, in a case involving the legality of port charges imposed by the PPA on the respondent Terminal Facilities and Services Corporation ("TEFASCO" for brevity). The port charges in question include: (1) 100% wharfage dues and berthing fees and (2) the 10% government share in arrastre/ stevedoring revenues and/or privilege fee, pursuant to Section 1213 of the Tariff and Customs Code. The antecedent facts are:
On July 11, 1974, P.D. No. 505 was promulgated, creating the Philippine Ports Authority (PPA). The Decree was later amended by P.D. No. 857 dated December 23, 1975 (otherwise known as the Revised PPA Charter). Under the Decree, the PPA is entrusted with the function of carrying out an integrated program for the planning, development, financing and operation of ports and port districts throughout the country. The powers, duties and jurisdiction of the Bureau of Customs concerning arrastre operations were transferred to and vested in the petitioner PPA (Philippine Ports Authority vs. Mendoza, 138 SCRA 496, 503). Pursuant to said decree, PPA was authorized to "regulate the rates or charges for port services or port related services so that, taking one year with another, such rates or charges furnish adequate working capital and produce an adequate return on the assets of the Authority"(PPA) (Section 20[b] and "to levy dues, rates, or charges for the use of the premises, works, appliances, facilities, or for services provided by or belonging to the Authority or any other organization concerned with port operations" (Section 6[b] [IX]). Furthermore, the PPA was authorized to impose a ten percent (10%) charge on the monthly gross earnings of the operators of arrastre and stevedoring services (also known as Government Share), (Pernito Arrastre Services, Inc. vs. Mendoza, 146 SCRA 430.) In its Board Resolution No. 7 dated April 21, 1976 embodying the "Memorandum Agreement," PPA laid down the terms and conditions under TEFASCO was allowed to construct specialized port and terminal facilities for incoming and outgoing foreign and domestic vessels and authorized to render port services, particularly, arrastre and stevedoring services on incoming and outgoing cargoes loaded on or unloaded from foreign and domestic vessels. (p. 112, Rollo.) On August 30, 1988, TEFASCO filed in the trial court a complaint for "declaration of nullity, prohibition, mandamus and damages with writ of preliminary injunction" against PPA, asking the court to restrain PPA: (a) from imposing and or collecting any form of income- sharing whether under the guise of a government share or privilege fee or by such other name or designation whether based on gross receipts from TEFASCO's arrastre/stevedoring or other port-related services or operations; (b) from collecting from TEFASCO, PPA's share of ten percent (10%) or any other percentage from the cargo handling revenue based on gross income; . . . (h) from collecting 100% wharf age, harbour, and berthing dues on cargoes and vessels availing of TEFASCO's port terminal facilities. (Annex E, pp. 6-7, Rollo.) On October 27, 1988, PPA filed an Answer to the Complaint (Annex F). Subsequently, on November 25, 1988, TEFASCO filed its Reply with Answer to Counterclaim (Annex G), PPA then filed its Opposition to TEFASCO's prayer for a writ of preliminary injunction (Annex H). The parties exchanged numerous other pleadings and memoranda. In an order dated December 14, 1988 (Annex C), the trial court granted TEFASCO's application for a writ of preliminary injunction. The dispositive portion of the order reads: "WHEREFORE, in view of the foregoing finding the...
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