THE Court of Appeals has ruled that Federal Express Pacific Inc. (Fedex) is operating in the Philippines illegally.
In a resolution penned by Associate Justice Danton Bueser, the court’s Fourth Division ruled that FedEx cannot run an international airfreight forwarding in the country because it is a foreign corporation.
The court affirmed its ruling issued on January 23 that FedEx is not qualified to do business in the country as it granted the petition filed by Merit Freight International Inc. and Ace Logistics Inc.
The three-member court held that under Section 11, Article XII of the 1987 Constitution, a public utility must be run by Filipino citizens or “corporations or associations organized under the laws of the Philippines”.
With its ruling, the CA ruled voided the May 2, 2011 resolution of the Civil Aeronautics Board (CAB) that allowed FedEx to set up operations in the Philippines.
Merit Freight International Inc. and Ace Logistics Inc. questioned CAB’s decision, saying FedEx is a foreign-owned company.
Merit Freight stressed that international airfreight forwarding is a public utility reserved for qualified Filipino individuals and corporations.
Ace Logistics argued that the CAB erred in granting permit to operate to Fedex despite the fact that it is a 100 percent foreign-owned and foreign-based.
The CA cited a previous ruling by the aeronautics board dated June 1, 1990, directing Royal Cargo Corporation, a company whose president then was a foreigner, to relinquish its top position to a Filipino national in accordance with Section 11, Article XII of the 1987 Constitution.
In that resolution, Royal Cargo questioned CAB’s resolution before the Court of Appeals, which ruled that the petitioner is covered by the restrictions embodied in the 1987 Constitution.