Diamond Drilling Corp. v. Newmont Philippines
NEW DOCTRINEFacts
The Antecedents: Respondent Newmont Philippines Incorporated (Newmont) filed eight applications for Financial or Technical Assistance (FTAA) with the MGB Central Office on December 20, 1994. On the same date, petitioner Diamond Drilling Corporation of the Philippines (Diamond Drilling) filed an application for Mineral Production Sharing Agreement (MPSA) with the MGB Regional Office in the Cordillera Administrative Region (MGB-CAR). Upon verification, it was found that Diamond Drilling's MPSA application conflicted with a portion of one of Newmont's FTAA applications. Republic Act No. 7942 (Philippine Mining Act of 1995) took effect on April 14, 1995. Newmont requested an opinion on the applicability of Section 8 of DAO 63 regarding the 72-hour furnishing requirement to the MGB Regional Office. The Director of MGB-CAR initially opined that the 72-hour period was not mandatory but later reversed this, stating it was mandatory. Diamond Drilling filed a protest seeking to annul Newmont's FTAA applications and asserting its preferential right. Newmont relinquished portions of its applied areas, reducing its total application to 81,000 hectares. Procedural History: The Panel of Arbitrators of the MGB-CAR ruled in favor of Diamond Drilling, declaring its MPSA application valid and granting it preferential right. Newmont appealed to the Mines Adjudication Board (MAB), which reversed the Panel's decision, ruling in favor of Newmont and sustaining its FTAA applications. The MAB found that fax machine copies were valid documents and that Newmont's applications were filed and accepted earlier. Diamond Drilling's motion for reconsideration was denied. Diamond Drilling then filed a petition for review with the Court of Appeals (CA), which affirmed the MAB's decision. The CA also denied Diamond Drilling's motion for reconsideration. The Petition: Diamond Drilling filed a petition for review on certiorari assailing the CA's decision affirming the MAB's ruling, which gave preferential right to Newmont's FTAA applications over Diamond Drilling's MPSA application.
Issue(s)
Whether the Court of Appeals committed a reversible error in affirming the decision of the Mines Adjudication Board giving preferential right to Newmont’s FTAA applications over Diamond Drilling’s MPSA application. Whether the requirement of furnishing the MGB Regional Office a copy of the FTAA application within 72 hours is mandatory or directory. Whether the transmission of fax machine copies of FTAA applications to the MGB Regional Office constitutes sufficient compliance with the 72-hour requirement.
Ruling
The petition is dismissed. The Court affirmed the Decision dated 16 January 2008 and Resolution dated 8 July 2008 of the Court of Appeals in CA-G.R. SP No. 96093, upholding the preferential right of Newmont Philippines, Inc. over the area covered by its application for Financial or Technical Assistance Agreement, and excluding the Mineral Production Sharing Agreement of Diamond Drilling Corporation of the Philippines over the same area.
Ratio Decidendi
On the preferential right based on the priority of filing: The Court reiterated the principle that in cases of conflicting applications for mining rights over the same area, priority is given to the applicant who first filed its application, as clearly stated in Section 8 of DAO 63. The records showed that Newmont filed its FTAA applications with the MGB Central Office on December 20, 1994, and these were registered on the same date after payment of fees. In contrast, Diamond Drilling filed its MPSA application on December 20, 1994, but only completed its requirements and paid the fees on December 22, 1994, with its application being registered on the latter date. Therefore, Newmont's filing clearly preceded Diamond Drilling's, entitling Newmont to priority. On the mandatory or directory nature of the 72-hour furnishing requirement: The Court affirmed the CA's ruling that the requirement in Section 8 of DAO 63 to furnish the MGB Regional Office a copy of the FTAA application within 72 hours is merely directory. The Court reasoned that the word "shall" in the provision precedes the filing of the application itself, not the furnishing of the copy to the Regional Office. The primary purpose of this requirement is to notify the Regional Office so it can verify the area and submit recommendations, which are only allied and recommendatory functions, with the ultimate power to grant or deny applications residing with the Central Office. Thus, interpreting the 72-hour period as mandatory would be far-fetched and would unduly impede the processing of applications. On the sufficiency of fax transmission as compliance: The Court found that Newmont satisfied the 72-hour requirement through fax transmission. The MGB Regional Office received a facsimile copy of Newmont's letter and FTAA application on December 21, 1994, approximately 24 hours after filing with the Central Office. The Court held that DAO 63 did not specify the mode of service or the type of copy required, and fax transmission is a reasonable and sufficient mode, especially considering the distance between offices and the short timeframe. The facsimile copy contained the essential information, including dates of filing and registration, and technical descriptions, thus fulfilling the purpose of notifying the Regional Office.
Main Doctrine
When there are two or more applicants for mining rights over the same area, priority is given to the applicant who first filed its application. The requirement to furnish a copy of an FTAA application to the MGB Regional Office within 72 hours is directory, and compliance through fax transmission is acceptable.