DECISION

LOPEZ, J., J.:

This Court resolves a Petition for Review on Certiorari¹ filed by the Department of Transportation (DOTr) and Department of Information and Communications Technology (DICT) assailing the Resolutions of the Court of Appeals (CA), which dismissed their Petition for Review assailing the Order of the Regional Trial Court (RTC) for the execution of the Final Arbitral Award ordering them to transfer title and ownership of the covered facilities to Digital Telecommunications Philippines, Inc. (Digitel).

The Antecedents

In the 1980s, the Department of Transportation and Communications (DOTC), predecessor of DOTr and DICT, embarked on a modernization program to provide telephone facilities in the provinces and remote areas in the country.

In line with the government’s thrust of liberalization and pursuant to Department Circular No. 87-188 and Department Circular No. 90-252, which encouraged private sector participation in the telecommunications sector, the DOTC commenced the process of privatizing its facilities (covered facilities) and conducted public bidding for the management, operation, maintenance, and development of the same.⁵ Digitel won the public bidding. Consequently, it executed three Facilities Management Agreements (FMAs) with the DOTC.⁶ When Digitel obtained its legislative franchise, DOTC and Digitel entered into eight Financial Lease Agreements (FLAs) for the purpose of leasing, managing, operating, maintaining, developing, and eventually transferring ownership of the facilities.

The FLAs had the following dates of execution:

1. Financial Lease Agreement dated November 9, 1993;

2. Financial Lease Agreement dated June 8, 1994;

3. Financial Lease Agreement dated December 7, 1994;

4. Financial Lease Agreement dated February 1, 1995;

5. Financial Lease Agreement dated June 22, 1995;

6. Financial Lease Agreement dated March 11, 1996;

7. Financial Lease Agreement dated March 11, 1996; and

8. Financial Lease Agreement dated March 11, 1996.⁷

Sometime in 1996, Digitel and DOTC commenced negotiations for Digitel’s buy-out of the facilities.⁸ The DOTC sought the approval of the Overseas Economic Cooperation Fund (OECF) for the buy-out.⁹ The OECF responded that it had no objection to DOTC’s proposal to sell the facilities to Digitel. The DOTC thus wrote Digitel inquiring if it was still interested in pursuing the buy-out of the facilities and required Digitel to submit its formal offer. In 1997, Digitel expressed its interest to buy-out the facilities and requested the creation of a committee to negotiate the terms of the buy-out.¹⁰ The DOTC then constituted a Buy-Out Negotiation Committee. In 2004, Digitel made its final offer to buy-out the facilities in the amount of PHP 2,398,917,947.00, computed as follows:

Item	Amount
a. Net Present Value (NPV) of the FMAS/FLAS	[PHP] 2,422,770,093.00
b. Unpaid lease payment up to June 2003	593,411,064.00
c. Proposed deductibles for various advances and additions undertaken by Claimant Digitel	(617,263,210.00)
Total	[PHP] 2,398,917,947.00¹¹

In response to the offer of Digitel, the Buy-Out Negotiation Committee of DOTC submitted a final offer in the amount of PHP 4,042,884,262.00, computed as follows:

Item	Amount
a. NPV of FLAs as of July 31, 2004	[PHP] 2,168,192,923.00
b. NPV of FMA facilities as of July 31, 2004	97,691,057.00
c. Unpaid lease payment as of July 31, 2004	1,440,926,712.00
d. Unpaid lease interest and penalty charges up to July 31, 2004	336,073,570.00
Total	[PHP] 4,042,884,262.00¹²

Digitel’s computation was premised on its position that the FLAs were sales on installment and that the computation it provided in its offer letter is the correct computation. On the other hand, the DOTC argued that the FLAS were ordinary lease contracts, and the computation provided in its September 3, 2004 Memorandum was the correct computation.¹³

At an impasse, the parties submitted to voluntary arbitration under the International Chamber of Commerce-International Court of Arbitration (ICC-ICA) pursuant to the arbitration clause incorporated in the FLAs. The arbitration commenced in 2006, conducted by a tribunal in the Philippines that was administered by the ICC-ICA. On June 19, 2007, the arbitral tribunal rendered a Final Award¹⁴ with the following disposition:

Wherefore in view of the foregoing, the Arbitral Tribunal declares that:

1. The tribunal has jurisdiction over the matter submitted for arbitration by claimant;

2. The eight Financial Lease Agreements (FLAs) entered into between parties are Sales-On-Installment;

3. The claimant validly exercised the right to buy-out the facilities in June 2003;

4. Claimant Digitel shall pay the buy-out price of [PHP] 2,398,917,947.00 to respondent;

5. Respondent DOTC shall execute the appropriate documents in favor of Digitel for the transfer of title and ownership of those facilities accepted and operated by Claimant Digitel;

6. The facilities to be bought-out include only those covered by the FLAs that have been accepted and operated by claimant Digitel and shall Exclude those facilities that are not covered by the FLAs.

7. The costs of arbitration including ICC administrative expenses, the expenses incurred by the Arbitral Tribunal and the fees of the Co-Arbitrators sum up to [USD] 402,378.00.

 

This amount shall be borne in equal shares by the parties or [USD] 201,189.00 for each party which sums are covered by the advance on costs paid to the ICC by the parties in equal shares[.]

 

Each party shall bear its own legal and other costs.

 

All other claims and counterclaims are dismissed.

 

SO ORDERED.¹⁵

In the Final Award, the arbitral tribunal addressed an independent claim by the Office of the Solicitor General (OSG), on behalf of the Government, where the OSG demanded that it be awarded 5% of whatever amount is awarded to the Government pursuant to Republic Act No. 9417. The arbitral tribunal however refused to take cognizance of the claim on the ground that it had no jurisdiction to order such payment. The arbitral tribunal added that the claim was a lawyer’s charging lien, which the OSG should enforce in a separate proceeding between itself and the government.¹⁶

A decade later, or on June 6, 2017, Digitel filed a petition with the RTC for the confirmation of the Final Arbitral Award as a “domestic arbitral award” under Rule 11 of A.M. No. 07-11-08-SC or the Special Alternative Dispute Resolution Rules (Special ADR Rules).¹⁷ On October 2, 2017, the OSG merely filed a Manifestation and Motion in Lieu of Comment by which it admitted the existence of the Final Arbitral Award and Digitel’s payment of PHP 2.4 billion to the government, before asserting anew its claim under Republic Act No. 9417. Thus, it neither opposed nor commented on Digitel’s petition on behalf of the government. Instead, the OSG prayed that the RTC uphold and approve its claim to direct the Bureau of Treasury to remit to its special account the amount it was claiming.¹⁸

In its Decision,¹⁹ the RTC granted Digitel’s petition. The dispositive portion stated thus:

WHEREFORE, premises considered, the instant Petition for the Confirmation of Arbitral Final Award filed by Digitel is hereby GRANTED. Accordingly, the Final Award dated June 19, 2007 rendered by the Arbitral Tribunal in ICC-ICA Case No. 14321/JB/JEM is hereby CONFIRMED. Likewise, the DOTr and DICT, as successors-in-interest of DOTC, are ordered to COMPLY with their obligations pursuant to the Final Award. Finally, the prayer of the OSG that its entitlement to 5% of the monetary award pursuant to R.A. No. 9417 is UPHELD and APPROVED, and thus be REMITTED to its Special Account in the General Fund.

 

SO ORDERED.²⁰

On October 4, 2019, the RTC Decision became final and executory.²¹ The controversy in this case arose when Digitel filed a Motion for the Issuance of a Writ of Execution,²² stating that it had already paid in full the buy-out price of PHP 2,398,917,947.00 as required by the Final Arbitral Award. The receipt by the government of the full price was likewise confirmed by the OSG. Given this and the fact that the RTC Decision had become final and executory, Digitel prayed for the issuance of the writ of execution of the RTC’s Decision confirming the Final Arbitral Award.²³ The OSG filed its Comment/Opposition,²⁴ claiming that the monies, facilities, and assets of DOTC, now the DOTr and DICT, were government properties that were exempt from execution. The OSG added that due to the separation of DOTr and DICT, an inventory of properties involved was ongoing and more time was needed for the devolution of power and the properties between the two agencies as well as the change of internal officers.²⁵ In its Order, the RTC directed the issuance of a writ of execution, agreeing with Digitel that there is no serious legal bar to the implementation of a writ of execution. It stated:

The court subscribes to the sound legal basis of the petitioner, considering that they have already complied with their obligations detailed in the final award. Contrary to the asseverations lamented by DOTC’s successors-in-interest, there are no public funds or properties involved in the instant case, as the properties subject of the proceedings have already been paid for and are rightfully owned by the petitioner. Depriving Digitel of the same by delaying the execution of the obligations stipulated in the award would unjustly enrich the government and cause injustice to the petitioner.

 

WHEREFORE, premises considered, the Motion for Execution filed by petitioner Digital Telecommunications Philippines, Inc. is hereby GRANTED. The Branch Clerk of Court is hereby directed to issue a Writ of Execution to implement the Decision of the court dated July 12, 2019.

 

SO ORDERED.²⁶ (Emphasis in the original)

The OSG filed a Motion for Reconsideration,²⁷ stating that Digitel must enforce its claim before COA, which has the jurisdiction over settlement of debts and claims of any sort owed by the government.²⁸ Finding that the OSG failed to raise new issues, the RTC denied the Motion for Reconsideration in its Order.²⁹ Aggrieved, the Government, through the OSG, filed before the CA a Petition for Review under Rule 19.12 of the Special ADR Rules, assailing the RTC Orders.³⁰ In its Resolution, the CA dismissed the Petition for Review under Rule 19.18 of the Special ADR Rules,³¹ upon finding that it lacked prima facie merit:

RULE 19.18. Action on the Petition. — The Court of Appeals may require the respondent to file a comment on the petition, not a motion to dismiss, within ten (10) days from notice, or dismiss the petition if it finds, upon consideration of the grounds alleged and the legal briefs submitted by the parties, that the petition does not appear to be prima facie meritorious.

The CA likewise found that the OSG failed to specify a ground under Rule 19.12 of the Special ADR Rules that would justify its appeal of the RTC’s Orders granting the execution of its Decision. The CA dismissed the Petition and found that Rule 12.19 did not allow an appeal from an order for the issuance of a writ of execution. The OSG filed its Motion for Reconsideration, asserting that it had legal basis to appeal the RTC’s Orders granting the execution, thus:

1. The Orders dated July 17, 2023 and October 2, 2023 are “final orders” which can be appealed under Rule 19.12(e) of the Special ADR Rules;

2. Even assuming that the Orders are merely interlocutory, exceptionally, they can still be the subject of an appeal because in this case, there has been a change in the situation of the parties making execution inequitable and execution is sought to be enforced against property exempt from execution;

3. While the Special ADR Rules are silent on the procedure for the execution of a confirmed domestic arbitral award, the Supreme Court has ruled that the Special ADR Rules “cover not only aspects of confirmation but necessarily extend to a confirmed award’s execution” making a petition for review under Rule 19.12 (e), Special ADR Rules, a proper remedy.³²

The CA, in its Resolution³³ denied the Motion, stating that:

In this case, instead of bringing a special civil action for certiorari under Rule 19.26 (f), Special ADR Rules, the petitioners resorted to an appeal by Petition for Review under Rule 19.12(e), Special ADR Rules. Therefore, the court finds no ground to disturb the court’s Resolution dated December 7, 2023.³⁴

In this Petition for Review on Certiorari, the OSG reasserts that the government availed of the correct remedy when it filed its Petition for Review before the CA, given that an appeal is allowed for final orders from the RTC “confirming, vacating or correcting/modifying a domestic arbitral award”³⁵ under the Rule 19.12(e) of the Special ADR Rules. Digitel filed its Comment/Opposition,³⁶ stating that the issuance of the writ of execution is ministerial on the part of the RTC, given the final and executory Decision confirming the arbitral award. It maintained its position that the OSG availed of an improper remedy when it appealed the RTC Orders by petition for review under Rule 19.12(e) of the Special ADR Rules. It also debunked the OSG’s assertions that government properties are exempt from execution and that the enforcement of claims should be subject to COA’s primary audit and approval.³⁷

Issue

The procedural issue in this case is whether the Government availed of the proper remedy when it filed a Petition for Review before the CA, appealing the RTC Order for the issuance of the writ of execution of the Final Arbitral Award, which ordered the government to transfer the FLA-covered facilities to Digitel.

This Court resolves the following issues:

First, whether execution is improper to compel the Government to transfer ownership of public properties to private persons such as Digitel; and

Second, whether Digitel must enforce its claim before the COA, which has jurisdiction over the settlement of debts and claims of any sort owned by the government.