By: Atty. Lew Earvin H. Manarin on January 30,2025

Courts are sometimes confronted with the question of whether they should assert jurisdiction or defer to an administrative body in cases involving technical or intricate matters. This doctrine strikes a careful balance between the powers of administrative agencies and the judiciary, ensuring that courts do not overstep their bounds when it comes to matters best left to those with the relevant technical expertise.

The Doctrine of Primary Jurisdiction asserts that courts cannot or will not determine a controversy involving questions that fall under the jurisdiction of an administrative tribunal until that tribunal has first resolved the matter. Specifically, it applies to cases where the question requires the specialized knowledge, experience, and services of the administrative body to address technical and intricate matters of fact. The principle is grounded in the belief that administrative bodies possess the expertise needed to handle issues within their specific competencies and exercise their sound administrative discretion.

The doctrine of primary jurisdiction and the doctrine of exhaustion of administrative remedies are closely linked, yet distinct from each other. Both doctrines aim to give administrative agencies the opportunity to resolve matters within their expertise before judicial intervention occurs.

Despite their similarities, the doctrines serve different purposes. The doctrine of exhaustion of administrative remedies is focused on the procedural step of seeking administrative remedies, while primary jurisdiction emphasizes the need for the agency’s specialized expertise to address substantive issues of a case. Failure to exhaust administrative remedies may bar judicial review, but primary jurisdiction requires courts to defer to agencies when issues demand their expertise.

In Province of Aklan v. Jody King Construction and Development Corp., the Supreme Court further elaborated on the doctrine of primary jurisdiction and ruled that it applies when a claim is initially cognizable by the courts but involves issues that fall within the jurisdiction of an administrative agency. In such cases, may suspend the judicial process pending referral of such issues to the administrative body for its view. The court’s role is to ensure that judicial intervention does not occur prematurely but only after the administrative body has had the opportunity to resolve the relevant issues.

In Camp John Hay Development Corp. v. Central Board of Assessment Appeals, the Supreme Court underscored that errors in real property tax assessments must be challenged administratively first. The taxpayer must follow the administrative procedure before approaching the court. If the taxpayer skips this step, the court cannot entertain the case. The court will only engage if the administrative process is completed. Hence, the case was remanded back to the Local Board of Assessment Appeals (LBAA) for the proper determination of the taxpayer’s exemption from real property tax.

However, while the doctrine of primary jurisdiction is rooted in sound policy, it is not an inflexible rule. There are several exceptions where the courts may intervene even before the administrative body has ruled on a subject matter. In Republic v. Lacap, the Supreme Court acknowledged the following exceptions to the doctrine:

(a) where there is estoppel on the part of the party invoking the doctrine;

(b) where the challenged administrative act is patently illegal, amounting to lack of jurisdiction;

(c) where there is unreasonable delay or official inaction that will irretrievably prejudice the complainant;

(d) where the amount involved is relatively small so as to make the rule impractical and oppressive;

(e) where the question involved is purely legal and will ultimately have to be decided by the courts of justice;

(f) where judicial intervention is urgent;

(g) when its application may cause great and irreparable damage;

(h) where the controverted acts violate due process;

(i) when the issue of non-exhaustion of administrative remedies has been rendered moot;

(j) when there is no other plain, speedy and adequate remedy;

(k) when strong public interest is involved; and,

(l) in quo warranto proceedings.

In the fairly recent case of Commissioner of Internal Revenue v. Estate of Mr. Charles Marvin Romig, the tax filed a judicial claim for a tax refund of erroneously collected taxes without waiting for the Commissioner’s ruling on the administrative claim for refund. The court ruled that even though the taxpayer did not wait for the ruling on the administrative claim for refund, its judicial claim for refund was timely filed within the statutory period. Under the circumstances, if the taxpayer had waited for the Commissioner to act on its claim knowing fully well that the prescriptive period was about to lapse, it would have resultantly forfeited its right to seek judicial recourse, thereby suffering irreparable damage.

The Doctrine of Primary Jurisdiction, when properly applied, serves as a check on the judicial process, preventing courts from overstepping their bounds in areas best handled by administrative agencies. Ultimately, the Doctrine of Primary Jurisdiction strikes a delicate balance between respecting the autonomy of administrative bodies and ensuring that the parties involved are not denied access to justice when the situation demands it.

Lew Earvin H. Manarin is a CPA-Lawyer and an associate of Mata-Perez, Tamayo & Francisco (MTF Counsel). This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any questions or comments regarding this article, you may email the author at info@mtfcounsel.com or visit MTF website at www.mtfcounsel.com.