Merit
Freight International Inc. vs. Federal Express Pacific Inc., C.A. G.R. SP. No.
119658, January 23, 2013
Subject: Transportation Law
FACTS
On 18 March 2009, respondent [Federal Express Pacific,
Inc.] filed with the Civil Aeronautics Board (“CAB”) an Application for
Authority to Operate as an International Airfreight Forwarder.
On 14 March 2011, after all parties to the case were
heard and evidence received, the CAB issued the respondent a provisional
authority to operate as an International Airfreight Forwarder. The license was
valid for one (1) year effective 10 March 2011 until 9 March 2012.
On 12 April 2011, respondent filed a Motion to Issue
Regular License, valid for a period of at least five (5) years.
On 25 April 2011, petitioner [Merit Freight
International, Inc.] filed a Motion for Reconsideration and Opposition/Comment
to Applicant's Motion for Issuance of Regular License.
On 2 May 2011, the CAB granted the motion and issued
respondent a regular license, allowing it to operate as an international
airfreight forwarder for a period of five years, i.e., from 2 May 2011 until 1
May 2016.
Petitioners felt aggrieved by the above resolution of the
Civil Aeronautics Board; thus, they filed the present petitions.
ISSUE
Whether or not only Filipinos can be granted a permit to engage
in international airfreight forwarding business.
RULING
Yes, only Filipinos can be granted a permit to engage in
international airfreight forwarding business.
The 1987 Constitution “provides for the Filipinization of
public utilities by requiring that any form of authorization for the operation
of public utilities should be granted only to ‘citizens of the Philippines or
to corporations or associations organized under the laws of the Philippines at
least sixty per centum of whose capital is owned by such citizens.’
In this case, Federal Express Pacific, Inc., a “foreign corporation”, disqualified in our country from operating as an “International Airfreight Forwarder” which is clearly a public utility. Old Civil Aeronautics Board’s policy of limiting the issuance of permits to Filipino citizens with regard to the business of international airfreight forwarding, and (2) appellate court’s ruling that international airfreight forwarding, as a public utility enterprise, is covered by the restriction provided under Section 11, Article XII of the 1987 Constitution.
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