Court backs Shell in legal fight with Manila
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The Philippines' Department of Energy (DoE) cannot temporarily take over operations of the oil industry in times of emergency, the Court of Appeals said as it dismissed the appeal filed by the government.
In an 11-page decision released yesterday by the Appeals Court 9th Division written by Associate Justice Socorro Inting, it affirmed the Makati court’s ruling that Section 14 (e) of Republic Act 8479 or the Downstream Oil Industry Deregulation Act of 1998 is unconstitutional.
The court said the provision has given the DoE “unbridled power…to perform essential acts which only the Congress is constitutionally mandated to perform”.
The case stems from Pilipinas Shell and Petroleum Corporation questioning in court the order issued by then president Gloria Arroyo mandating an oil price freeze after the country was hit by typhoons in 2009.
Arroyo’s order was issued pursuant to Section 14 (e) of the Oil Deregulation Law. The provision states that “in times of national emergency, when the public interest so requires, the DoE may, during the emergency and under reasonable terms prescribed by it, temporary take over or direct the operation of any person or entity engaged in the industry”.
The Makati Court ruled in favour of Shell, declaring Section 14 (e) as void and unconstitutional.
The lower court’s ruling prompted the Department of Energy-Department of Justice Joint Task Force to elevate the case to the Court of Appeals.
The appeals court, in dismissing the government’s appeal, ruled that exercise of emergency powers required Congress’s nod first, which had not been sought in this case.
