EN BANC
|
petitioner, - versus - DEPARTMENT
OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY LEANDRO R. MENDOZA and Respondents. x ----------------------------------------- x REPUBLIC OF THE PHILIPPINES, represented by
the DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS and MANILA INTERNATIONAL
AIRPORT AUTHORITY, petitioners, - versus - HON. COURT OF APPEALS and
SALACNIB BATERINA, Respondents. |
|
G.R. No. 169914 G.R. No. 174166 Present: PUNO, C.J., QUISUMBING, YNARES-SANTIAGO,
CARPIO,* AUSTRIA-MARTINEZ,
CARPIO
MORALES, AZCUNA,
TINGA, CHICO-NAZARIO,
VELASCO,
JR., NACHURA,
REYES,
DE
CASTRO, and BRION,
JJ. Promulgated: April 18, 2008 |
CHICO-NAZARIO, J.:
This Court is still continuously besieged by Petitions arising from the awarding of the Ninoy Aquino International Airport International Passenger Terminal III (NAIA IPT III) Project to the Philippine International Air Terminals Co., Inc. (PIATCO), despite the promulgation by this Court of Decisions and Resolutions in two cases, Agan, Jr. v. Philippine International Air Terminals Co., Inc.[1] and Republic v. Gingoyon,[2] which already resolved the more basic and immediate issues arising from the said award. The sheer magnitude of the project, the substantial cost of its building, the expected high profits from its operations, and its remarkable impact on the Philippine economy, consequently raised significant interest in the project from various quarters.
Once more, two new Petitions concerning the NAIA IPT III Project are before this Court. It is only appropriate, however, that the Court first recounts its factual and legal findings in Agan and Gingoyon to ascertain that its ruling in the Petitions at bar shall be consistent and in accordance therewith.
Agan,
Jr. v. Philippine
International Air Terminals Co., Inc.
(G.R. Nos. 155001, 155547, and 155661)
Already established and incontrovertible are the following facts in Agan:
In August 1989, the [Department of Trade
and Communications (DOTC)] engaged the services of Aeroport de Paris (ADP) to
conduct a comprehensive study of the Ninoy Aquino International Airport (NAIA)
and determine whether the present airport can cope with the traffic development
up to the year 2010. The study consisted
of two parts: first, traffic forecasts,
capacity of existing facilities, NAIA future requirements, proposed master
plans and development plans; and second, presentation of the preliminary design
of the passenger terminal building. The
ADP submitted a Draft Final Report to the DOTC in December 1989.
Some time in 1993, six business leaders
consisting of John Gokongwei, Andrew Gotianun, Henry Sy, Sr., Lucio Tan, George
Ty and Alfonso Yuchengco met with then President Fidel V. Ramos to explore the
possibility of investing in the construction and operation of a new
international airport terminal. To
signify their commitment to pursue the project, they formed the
On October 5, 1994, AEDC submitted an
unsolicited proposal to the Government through the DOTC/[Manila International
Airport Authority (MIAA)] for the development of NAIA International Passenger
Terminal III (NAIA IPT III) under a build-operate-and-transfer arrangement
pursuant to RA 6957 as amended by RA 7718 (BOT Law).
On
On
On June 7, 14, and 21, 1996, DOTC/MIAA
caused the publication in two daily newspapers of an invitation for competitive
or comparative proposals on AEDC’s unsolicited proposal, in accordance with
Sec. 4-A of RA 6957, as amended. The
alternative bidders were required to submit three (3) sealed envelopes on or
before
On P50,000.00 (US$2,000).
The Bid Documents issued by the PBAC
provided among others that the proponent must have adequate capability to
sustain the financing requirement for the detailed engineering, design,
construction, operation, and maintenance phases of the project. The proponent would be evaluated based on its
ability to provide a minimum amount of equity to the project, and its capacity
to secure external financing for the project.
On
On
a.
Aside from the fixed Annual
Guaranteed Payment, the proponent shall include in its financial proposal an
additional percentage of gross revenue share of the Government, as follows:
i. First 5 years 5.0%
ii. Next 10 years 7.5%
iii. Next 10 years 10.0%
b.
The amount of the fixed Annual
Guaranteed Payment shall be subject of the price challenge. Proponent may offer an Annual Guaranteed
Payment which need not be of equal amount, but payment of which shall start
upon site possession.
c.
The project proponent must have
adequate capability to sustain the financing requirement for the detailed
engineering, design, construction, and/or operation and maintenance phases of
the project as the case may be. For
purposes of pre-qualification, this capability shall be measured in terms of:
i.
Proof of the availability of the
project proponent and/or the consortium to provide the minimum amount of equity
for the project; and
ii.
a letter testimonial from
reputable banks attesting that the project proponent and/or the members of the
consortium are banking with them, that the project proponent and/or the members
are of good financial standing, and have adequate resources.
d.
The basis for the prequalification
shall be the proponent’s compliance with the minimum technical and financial
requirements provided in the Bid Documents and the [Implementing Rules and
Regulations (IRR)] of the BOT Law. The
minimum amount of equity shall be 30% of the Project Cost.
e.
Amendments to the draft Concession
Agreement shall be issued from time to time.
Said amendments shall only cover items that would not materially affect
the preparation of the proponent’s proposal.
On
In September 1996, the PBAC issued Bid
Bulletin No. 5, entitled “Answers to the Queries of PAIRCARGO as Per Letter
Dated September 3 and 10, 1996.”
Paircargo’s queries and the PBAC’s responses were as follows:
1.
It is difficult for Paircargo and Associates to meet the required minimum
equity requirement as prescribed in Section 8.3.4 of the Bid Documents
considering that the capitalization of each member company is so structured to
meet the requirements and needs of their current respective business undertaking/activities. In order to comply with this equity
requirement, Paircargo is requesting PBAC to just allow each member of (sic)
corporation of the Joint Venture to just execute an agreement that embodies a
commitment to infuse the required capital in case the project is awarded to the
Joint Venture instead of increasing each corporation’s current authorized
capital stock just for prequalification purposes.
In
prequalification, the agency is interested in one’s financial capability at the
time of prequalification, not future or potential capability.
A
commitment to put up equity once awarded the project is not enough to establish
that “present” financial capability.
However, total financial capability of all member companies of the
Consortium, to be established by submitting the respective companies’ audited
financial statements, shall be acceptable.
2. At present, Paircargo is negotiating with
banks and other institutions for the extension of a Performance Security to the
joint venture in the event that the Concessions Agreement (sic) is awarded to
them. However, Paircargo is being
required to submit a copy of the draft concession as one of the documentary
requirements. Therefore, Paircargo is
requesting that they’d (sic) be furnished copy of the approved negotiated
agreement between the PBAC and the AEDC at the soonest possible time.
A
copy of the draft Concession Agreement is included in the Bid Documents. Any material changes would be made known to
prospective challengers through bid bulletins.
However, a final version will be issued before the award of contract.
The PBAC also stated that it would
require AEDC to sign Supplement C of the Bid Documents (Acceptance of Criteria
and Waiver of Rights to Enjoin Project) and to submit the same with the required
Bid Security.
On September 20, 1996, the consortium
composed of People’s Air Cargo and Warehousing Co., Inc. (Paircargo), Phil. Air
and Grounds Services, Inc. (PAGS) and Security Bank Corp. (Security Bank)
(collectively, Paircargo Consortium) submitted their competitive proposal to
the PBAC. On
On
a. The lack of corporate approvals and
financial capability of PAIRCARGO;
b. The lack of corporate approvals and
financial capability of PAGS;
c. The prohibition imposed by RA 337, as
amended (the General Banking Act) on the amount that Security Bank could
legally invest in the project;
d. The inclusion of Siemens as a contractor
of the PAIRCARGO Joint Venture, for prequalification purposes; and
e. The appointment of Lufthansa as the
facility operator, in view of the Philippine requirement in the operation of a
public utility.
The PBAC gave its reply on
The PBAC then proceeded with the opening
of the second envelope of the Paircargo Consortium which contained its
Technical Proposal.
On October 3, 1996, AEDC reiterated its
objections, particularly with respect to Paircargo’s financial capability, in
view of the restrictions imposed by Section 21-B of the General Banking Act and
Sections 1380 and 1381 of the Manual Regulations for Banks and Other Financial
Intermediaries. On
On P135 million as guaranteed payment for 27 years
while Paircargo Consortium offered to pay the government a total of P17.75
billion for the same period.
Thus, the PBAC formally informed AEDC
that it had accepted the price proposal submitted by the Paircargo Consortium,
and gave AEDC 30 working days or until
As AEDC failed to match the proposal
within the 30-day period, then DOTC Secretary Amado Lagdameo, on
On
AEDC subsequently protested the alleged
undue preference given to PIATCO and reiterated its objections as regards the
prequalification of PIATCO.
On
On
x x x x
On
On
On
Subsequently, the Government and PIATCO
signed three Supplements to the ARCA.
The First Supplement was signed on
x x x x
Meanwhile, the MIAA which is charged with
the maintenance and operation of the NAIA Terminals I and II, had existing
concession contracts with various service providers to offer international
airline airport services, such as in-flight catering, passenger handling, ramp
and ground support, aircraft maintenance and provisions, cargo handling and
warehousing, and other services, to several international airlines at the
NAIA. x x x.
On
On
On
On
On
During the pendency of the case before this
Court, President Gloria Macapagal Arroyo, on
The Court first dispensed with the procedural issues raised in Agan, ruling that (a) the MIAA service providers and its employees, petitioners in G.R. Nos. 155001 and 155661, had the requisite standing since they had a direct and substantial interest to protect by reason of the implementation of the PIATCO Contracts which would affect their source of livelihood;[4] and (b) the members of the House of Representatives, petitioners in G.R. No. 155547, were granted standing in view of the serious legal questions involved and their impact on public interest.[5]
As to the merits of the Petitions in Agan, the Court concluded that:
In sum, this Court rules that in view of
the absence of the requisite financial capacity of the Paircargo Consortium,
predecessor of respondent PIATCO, the award by the PBAC of the contract for the
construction, operation and maintenance of the NAIA IPT III is null and void.
Further, considering that the 1997 Concession Agreement contains material and
substantial amendments, which amendments had the effect of converting the 1997
Concession Agreement into an entirely different agreement from the contract
bidded upon, the 1997 Concession Agreement is similarly null and void for being
contrary to public policy. The
provisions under Sections 4.04(b) and (c) in relation to Section 1.06 of the
1997 Concession Agreement and Section 4.04(c) in relation to Section 1.06 of
the ARCA, which constitute a direct government guarantee expressly prohibited
by, among others, the BOT Law and its Implementing Rules and Regulations are
also null and void. The Supplements, being accessory contracts to the ARCA, are
likewise null and void.[6]
Hence, the fallo of the
Court’s Decision in Agan reads:
WHEREFORE, the 1997 Concession Agreement, the
Amended and Restated Concession Agreement and the Supplements thereto are set
aside for being null and void.[7]
In a
Resolution[8] dated
This Court, however,
is not unmindful of the reality that the structures comprising the NAIA IPT III
facility are almost complete and that funds have been spent by PIATCO in their
construction. For the government to take
over the said facility, it
has to compensate respondent PIATCO as builder of the said structures. The compensation
must be just and in accordance with law and equity for the government
can not unjustly enrich itself at the expense of PIATCO and its investors.[10] (Emphasis ours.)
It is these
afore-quoted pronouncements that gave rise to the Petition in Gingoyon.
Republic
v. Gingoyon (G.R. No. 166429)
According to
the statement of facts in Gingoyon:
After
the promulgation of the rulings in Agan, the NAIA 3 facilities have
remained in the possession of PIATCO, despite the avowed intent of the
Government to put the airport terminal into immediate operation. The Government
and PIATCO conducted several rounds of negotiation regarding the NAIA 3
facilities. It also appears that
arbitral proceedings were commenced before the International Chamber of
Commerce International Court of Arbitration and the International Centre for
the Settlement of Investment Disputes, although the Government has raised
jurisdictional questions before those two bodies.
Then, on P3,002,125,000.00 (3 Billion) in Cash with the
Land Bank of the
The
case was raffled to Branch 117 of the Pasay City RTC, presided by respondent
judge Hon. Henrick F. Gingoyon (Hon. Gingoyon). On the same day that the Complaint
was filed, the RTC issued an Order directing the issuance of a writ of
possession to the Government, authorizing it to “take or enter upon the possession”
of the NAIA 3 facilities. Citing the case of City of Manila v. Serrano,
the RTC noted that it had the ministerial duty to issue the writ of possession
upon the filing of a complaint for expropriation sufficient in form and
substance, and upon deposit made by the government of the amount equivalent to
the assessed value of the property subject to expropriation. The RTC found
these requisites present, particularly noting that “[t]he case record shows
that [the Government has] deposited the assessed value of the [NAIA 3
facilities] in the Land Bank of the
However, on
There
are at least two crucial differences between the respective procedures under
Rep. Act No. 8974 and Rule 67. Under the statute, the Government is required to
make immediate payment to the property owner upon the filing of the complaint
to be entitled to a writ of possession, whereas in Rule 67, the Government
is required only to make an initial deposit with an authorized government
depositary. Moreover, Rule 67 prescribes that the initial deposit be equivalent
to the assessed value of the property for purposes of taxation, unlike Rep. Act
No. 8974 which provides, as the relevant standard for initial compensation, the
market value of the property as stated in the tax declaration or the current
relevant zonal valuation of the Bureau of Internal Revenue (BIR), whichever is
higher, and the value of the improvements and/or structures using the
replacement cost method.
Accordingly,
on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section 10 of the
Implementing Rules, the RTC made key qualifications to its earlier issuances. First,
it directed the Land Bank of the Philippines, Baclaran Branch (LBP-Baclaran),
to immediately release the amount of US$62,343,175.77 to PIATCO, an amount
which the RTC characterized as that which the Government “specifically made
available for the purpose of this expropriation;” and such amount to be
deducted from the amount of just compensation due PIATCO as eventually
determined by the RTC. Second, the Government was directed to submit to
the RTC a Certificate of Availability of Funds signed by authorized officials
to cover the payment of just compensation. Third, the Government was
directed “to maintain, preserve and safeguard” the NAIA 3 facilities or
“perform such as acts or activities in preparation for their direct operation”
of the airport terminal, pending expropriation proceedings and full payment of
just compensation. However, the Government was prohibited “from performing acts
of ownership like awarding concessions or leasing any part of [NAIA 3] to other
parties.”
The
very next day after the issuance of the assailed
The
RTC heard the Urgent Motion for Reconsideration and Motion for
Inhibition on
Thus, the present Petition for
Certiorari and Prohibition under Rule 65 was filed on
The Court
resolved the Petition of the Republic of the
In
conclusion, the Court summarizes its rulings as follows:
(1)
The 2004 Resolution in Agan sets the base requirement that has to
be observed before the Government may take over the NAIA 3, that there must be
payment to PIATCO of just compensation in accordance with law and equity. Any
ruling in the present expropriation case must be conformable to the dictates of
the Court as pronounced in the Agan cases.
(2)
Rep. Act No. 8974 applies in this case, particularly insofar as it requires the
immediate payment by the Government of at least the proffered value of the
NAIA 3 facilities to PIATCO and provides certain valuation standards or methods
for the determination of just compensation.
(3)
Applying Rep. Act No. 8974, the implementation of Writ of Possession in favor
of the Government over NAIA 3 is held in abeyance until PIATCO is
directly paid the amount of P3 Billion, representing the proffered
value of NAIA 3 under Section 4(c) of the law.
(4)
Applying Rep. Act No. 8974, the Government is authorized to start the
implementation of the NAIA 3 Airport terminal project by performing the acts
that are essential to the operation of the NAIA 3 as an international airport terminal
upon the effectivity of the Writ of Possession, subject to the conditions
above-stated. As prescribed by the Court, such authority encompasses “the
repair, reconditioning and improvement of the complex, maintenance of the
existing facilities and equipment, installation of new facilities and
equipment, provision of services and facilities pertaining to the facilitation
of air traffic and transport, and other services that are integral to a
modern-day international airport.”
5) The RTC is mandated to complete its determination of the just compensation within sixty (60) days from finality of this Decision. In doing so, the RTC is obliged to comply with the standards set under Rep. Act No. 8974 and its Implementing Rules. Considering that the NAIA 3 consists of structures and improvements, the valuation thereof shall be determined using the replacements cost method, as prescribed under Section 10 of the Implementing Rules.
(6)
There was no grave abuse of discretion attending the RTC Order appointing
the commissioners for the purpose of determining just compensation. The
provisions on commissioners under Rule 67 shall apply insofar as they are not
inconsistent with Rep. Act No. 8974, its Implementing Rules, or the rulings of
the Court in Agan.
(7)
The Government shall pay the just compensation fixed in the decision of the
trial court to PIATCO immediately upon the finality of the said decision.
(8)
There is no basis for the Court to direct the inhibition of Hon. Gingoyon.
All
told, the Court finds no grave abuse of discretion on the part of the RTC to
warrant the nullification of the questioned orders. Nonetheless, portions of
these orders should be modified to conform with law and the pronouncements made
by the Court herein.[12]
The decretal portion of the Court’s Decision in Gingoyon thus reads:
WHEREFORE,
the Petition is GRANTED in PART with respect to the orders dated
1) The
implementation of the Writ of Possession dated 21 December 2004 is HELD IN
ABEYANCE, pending payment by petitioners to PIATCO of the amount of Three
Billion Two Million One Hundred Twenty Five Thousand Pesos (P3,002,125,000.00),
representing the proffered value of the NAIA 3 facilities;
2) Petitioners,
upon the effectivity of the Writ of Possession, are authorized [to] start the
implementation of the Ninoy Aquino International Airport Pasenger Terminal III
project by performing the acts that are essential to the operation of the said
International Airport Passenger Terminal project;
3) RTC
Branch 117 is hereby directed, within sixty (60) days from finality of this
Decision, to determine the just compensation to be paid to PIATCO by the
Government.
The
Order dated 7 January 2005 is AFFIRMED in all respects subject to the
qualification that the parties are given ten (10) days from finality of this Decision
to file, if they so choose, objections to the appointment of the
commissioners decreed therein.
The
Temporary Restraining Order dated
No pronouncement as to costs.[13]
Motions
for Partial Reconsideration of the foregoing Decision were filed by therein
In
a Resolution dated
Admittedly, the 2004 Resolution in Agan could be construed as mandating the full payment of the final amount of just compensation before the Government may be permitted to take over the NAIA 3. However, the Decision ultimately rejected such a construction, acknowledging the public good that would result from the immediate operation of the NAIA 3. Instead, the Decision adopted an interpretation which is in consonance with Rep. Act No. 8974 and with equitable standards as well, that allowed the Government to take possession of the NAIA 3 after payment of the proffered value of the facilities to PIATCO. Such a reading is substantially compliant with the pronouncement in the 2004 Agan Resolution, and is in accord with law and equity. In contrast, the Government’s position, hewing to the strict application of Rule 67, would permit the Government to acquire possession over the NAIA 3 and implement its operation without having to pay PIATCO a single centavo, a situation that is obviously unfair. Whatever animosity the Government may have towards PIATCO does not acquit it from settling its obligations to the latter, particularly those which had already been previously affirmed by this Court.[14]
The
Court, in the same Resolution, denied all the three motions for intervention of
Asakihosan Corporation, Takenaka Corporation, and Congressman Baterina, and
ruled as follows:
We now turn to the three (3) motions for intervention all of which were filed after the promulgation of the Court’s Decision. All three (3) motions must be denied. Under Section 2, Rule 19 of the 1997 Rules of Civil Procedure the motion to intervene may be filed at any time before rendition of judgment by the court. Since this case originated from an original action filed before this Court, the appropriate time to file the motions-in-intervention in this case if ever was before and not after resolution of this case. To allow intervention at this juncture would be highly irregular. It is extremely improbable that the movants were unaware of the pendency of the present case before the Court, and indeed none of them allege such lack of knowledge.
Takenaka and Asahikosan rely on Mago v. Court of Appeals wherein the Court took the extraordinary step of allowing the motion for intervention even after the challenged order of the trial court had already become final. Yet it was apparent in Mago that the movants therein were not impleaded despite being indispensable parties, and had not even known of the existence of the case before the trial court, and the effect of the final order was to deprive the movants of their land. In this case, neither Takenaka nor Asahikosan stand to be dispossessed by reason of the Court’s Decision. There is no palpable due process violation that would militate the suspension of the procedural rule.
Moreover, the requisite legal
interest required of a party-in-intervention has not been established so as to
warrant the extra-ordinary step of allowing intervention at this late stage. As
earlier noted, the claims of Takenaka and Asahikosan have not been judicially
proved or conclusively established as fact by any trier of facts in this
jurisdiction. Certainly, they could not be considered as indispensable parties
to the petition for certiorari. In the case of Representative Baterina, he
invokes his prerogative as legislator to curtail the disbursement without
appropriation of public funds to compensate PIATCO, as well as that as a
taxpayer, as the basis of his legal standing to intervene. However, it should
be noted that the amount which the Court directed to be paid by the Government
to PIATCO was derived from the money deposited by the Manila International
Airport Authority, an agency which enjoys corporate autonomy and possesses a
legal personality separate and distinct from those of the National
Government and agencies thereof whose budgets have to be approved by Congress.
It is also observed that the interests of the movants-in-intervention may be duly litigated in proceedings which are extant before lower courts. There is no compelling reason to disregard the established rules and permit the interventions belatedly filed after the promulgation of the Court’s Decision.[15]
Asia’s
Emerging Dragon Corporation v. Department of Transportation and Communications
and
Banking on this Court’s declaration in Agan that the award of the NAIA IPT III Project to PIATCO is null and void, Asia’s Emerging Dragon Corporation (AEDC) filed before this Court the present Petition for Mandamus and Prohibition (with Application for Temporary Restraining Order), praying of this Court that:
(1) After
due hearing, judgment be rendered commanding the Respondents, their officers,
agents, successors, representatives or persons or entities acting on their
behalf, to formally award the NAIA-APT [sic] III PROJECT to
Petitioner AEDC and to execute and formalize with Petitioner AEDC the approved
Draft Concession Agreement embodying the agreed terms and conditions for the
operation of the NAIA-IPT III Project and directing Respondents to cease and
desist from awarding the NAIA-IPT Project to third parties or negotiating into
any concession contract with third parties.
(2) Pending
resolution on the merits, a Temporary Restraining Order be issued enjoining
Respondents, their officers, agents, successors or representatives or persons
or entities acting on their behalf from negotiating, re-bidding, awarding or otherwise
entering into any concession contract with PIATCO and other third parties for
the operation of the NAIA-IPT III Project.
Other relief and remedies,
just and equitable under the premises, are likewise prayed for.[16]
AEDC bases its Petition on the following grounds:
I.
PETITIONER AEDC,
BEING THE RECOGNIZED AND UNCHALLENGED ORIGINAL PROPONENT, HAS THE EXCLUSIVE,
CLEAR AND VESTED STATUTORY RIGHT TO THE AWARD OF THE NAIA-IPT III PROJECT;
II.
RESPONDENTS HAVE
A STATUTORY DUTY TO PROTECT PETITIONER AEDC AS THE UNCHALLENGED ORIGINAL
PROPONENT AS A RESULT OF THE SUPREME COURT’S NULLIFICATION OF THE AWARD OF THE
NAIA-IPT III PROJECT TO PIATCO[; and]
III.
RESPONDENTS HAVE
NO LEGAL BASIS OR AUTHORITY TO TAKE OVER THE NAIA-IPT III PROJECT, TO THE
EXCLUSION OF PETITIONER AEDC, OR TO AWARD THE PROJECT TO THIRD PARTIES.[17]
At the crux of the Petition of AEDC is its claim that, being the recognized and unchallenged original proponent of the NAIA IPT III Project, it has the exclusive, clear, and vested statutory right to the award thereof. However, the Petition of AEDC should be dismissed for lack of merit, being as it is, substantially and procedurally flawed.
SUBSTANTIVE INFIRMITY
A petition for mandamus is governed by Section 3 of Rule 65 of the Rules of Civil Procedure, which reads –
SEC. 3. Petition
for mandamus. – When any tribunal,
corporation, board, officer or person unlawfully neglects the performance of an
act which the law specifically enjoins as a duty resulting from an office,
trust, or station, or unlawfully excludes another from the use and enjoyment of
a right or office to which such other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary course of law, the person aggrieved
thereby may file a verified petition in the proper court, alleging the facts
with certainty and praying that judgment be rendered commanding the respondent,
immediately or some other time to be specified by the court, to do the act
required to be done to protect the rights of the petitioner, and to pay the
damages sustained by the petitioner by reason of the wrongful acts of the
respondent.
It is well-established in our jurisprudence that only specific legal rights are enforceable by mandamus, that the right sought to be enforced must be certain and clear, and that the writ will not issue in cases where the right is doubtful. Just as fundamental is the principle governing the issuance of mandamus that the duties to be performed must be such as are clearly and peremptorily enjoined by law or by reason of official station.[18]
A rule long familiar is that mandamus never issues in doubtful cases. It requires a showing of a complete and clear legal right in the petitioner to the performance of ministerial acts. In varying language, the principle echoed and reechoed is that legal rights may be enforced by mandamus only if those rights are well-defined, clear and certain. Otherwise, the mandamus petition must be dismissed.[19]
The right that AEDC is seeking to enforce is supposedly enjoined by Section 4-A of Republic Act No. 6957,[20] as amended by Republic Act No. 7718, on unsolicited proposals, which provides –
SEC. 4-A. Unsolicited
proposals. – Unsolicited proposals
for projects may be accepted by any government agency or local government unit
on a negotiated basis: Provided, That, all the following conditions are met:
(1) such projects involve a new concept or technology and/or are not part of
the list of priority projects, (2) no direct government guarantee, subsidy or
equity is required, and (3) the government agency or local government unit has
invited by publication, for three (3) consecutive weeks, in a newspaper of
general circulation, comparative or competitive proposals and no other proposal
is received for a period of sixty (60) working days: Provided, further, That in
the event another proponent submits a lower price proposal, the original
proponent shall have the right to match the price within thirty (30) working
days.
In furtherance of the afore-quoted provision, the Implementing Rules and Regulations (IRR) of Republic Act No. 6957, as amended by Republic Act No. 7718, devoted the entire Rule 10 to Unsolicited Proposals, pertinent portions of which are reproduced below –
Sec. 10.1.
Requisites for Unsolicited Proposals. – Any Agency/LGU may accept
unsolicited proposals on a negotiated basis provided that all the following
conditions are met:
a. the project involves a new concept or technology and/or is not
part of the list of priority projects;
b. no direct government guarantee, subsidy or equity is required; and
c. the Agency/LGU concerned has invited by publication, for three (3)
consecutive weeks, in a newspaper of general circulation, comparative or
competitive proposals and no other proposal is received for a period of sixty
(60) working days. In the event that
another project proponent submits a price proposal lower than that submitted by
the original proponent, the latter shall have the right to match said price
proposal within thirty (30) working days.
Should the original proponent fail to match the lower price proposal
submitted within the specified period, the contract shall be awarded to the
tenderer of the lowest price. On the
other hand, if the original project proponent matches the submitted lowest
price within the specified period, he shall be immediately be awarded the
project.
x x x x
Sec. 10.6. Evaluation of Unsolicited
Proposals. – The Agency/LGU is tasked
with the initial evaluation of the proposal.
The Agency/LGU shall: 1) appraise the merits of the project; 2) evaluate
the qualification of the proponent; and 3) assess the appropriateness of the
contractual arrangement and reasonableness of the risk allocation. The Agency/LGU is given sixty (60) days to
evaluate the proposal from the date of submission of the complete
proposal. Within this 60-day period, the
Agency/LGU, shall advise the proponent in writing whether it accepts or rejects
the proposal. Acceptance means
commitment of the Agency/LGU to pursue the project and recognition of the
proponent as the “original proponent.”
At this point, the Agency/LGU will no longer entertain other similar
proposals until the solicitation of comparative proposals. The implementation of the project, however,
is still contingent primarily on the approval of the appropriate approving
authorities consistent with Section 2.7 of these IRR, the agreement between the
original proponent and the Agency/LGU of the contract terms, and the approval
of the contract by the [Investment Coordination Committee (ICC)] or Local
Sanggunian.
x x x x
Sec. 10.9. Negotiation With the Original Proponent. – Immediately after ICC/Local Sanggunian’s
clearance of the project, the Agency/LGU shall proceed with the in-depth
negotiation of the project scope, implementation arrangements and concession
agreement, all of which will be used in the Terms of Reference for the
solicitation of comparative proposals.
The Agency/LGU and the proponent are given ninety (90) days upon receipt
of ICC’s approval of the project to conclude negotiations. The Agency/LGU and the original proponent
shall negotiate in good faith. However,
should there be unresolvable differences during the negotiations, the
Agency/LGU shall have the option to reject the proposal and bid out the
project. On the other hand, if the
negotiation is successfully concluded, the original proponent shall then be
required to reformat and resubmit its proposal in accordance with the
requirements of the Terms of Reference to facilitate comparison with the
comparative proposals. The Agency/LGU
shall validate the reformatted proposal if it meets the requirements of the TOR
prior to the issuance of the invitation for comparative proposals.
x x x x
Sec. 10.11. Invitation for Comparative Proposals. The Agency/LGU shall publish the invitation
for comparative or competitive proposals only after ICC/Local Sanggunian issues
a no objection clearance of the draft contract.
The invitation for comparative or competitive proposals should be
published at least once every week for three (3) weeks in at least one (1)
newspaper of general circulation. It
shall indicate the time, which should not be earlier than the last date of
publication, and place where tender/bidding documents could be obtained. It shall likewise explicitly specify a time
of sixty (60) working days reckoned from the date of issuance of the
tender/bidding documents upon which proposals shall be received. Beyond said deadline, no proposals shall be
accepted. A pre-bid conference shall be
conducted ten (10) working days after the issuance of the tender/bidding
documents.
Sec. 10.12. Posting of Bid Bond by Original Proponent. –
The original proponent shall be required at the date of the first date of the
publication of the invitation for comparative proposals to submit a bid bond
equal to the amount and in the form required of the challengers.
Sec. 10.13. Simultaneous Qualification of the Original
Proponent. – The Agency/LGU shall qualify the original proponent based on the
provisions of Rule 5 hereof, within thirty (30) days from start of negotiation. For consistency, the evaluation criteria used
for qualifying the original proponent should be the same criteria used for
qualifying the original proponent should be the criteria used in the Terms of
Reference for the challengers.
x x x x
Sec. 10.16. Disclosure of the Price Proposal. – The
disclosure of the price proposal of the original proponent in the Tender
Documents will be left to the discretion of the Agency/LGU. However, if it was not disclosed in the
Tender Documents, the original proponent’s price proposal should be revealed
upon the opening of the financial proposals of the challengers. The right of the original proponent to
match the best proposal within thirty (30) working days starts upon official
notification by the Agency/LGU of the most advantageous financial proposal.
(Emphasis ours.)
In her sponsorship speech on Senate
Bill No. 1586 (the precursor of Republic Act No. 7718), then Senator (now
President of the Republic of the
The object of the amendment is
to protect proponents which have already incurred costs in the conceptual
design and in the preparation of the proposal, and which may have adopted an
imaginative method of construction or innovative concept for the proposal. The amendment also aims to harness the
ingenuity of the private sector to come up with solutions to the country’s infrastructure
problems.[21]
It is irrefragable that Section 4-A of Republic Act No. 6957, as amended by Republic Act No. 7718, and Section 10 of its IRR, accord certain rights or privileges to the original proponent of an unsolicited proposal for an infrastructure project. They are meant to encourage private sector initiative in conceptualizing infrastructure projects that would benefit the public. Nevertheless, none of these rights or privileges would justify the automatic award of the NAIA IPT III Project to AEDC after its previous award to PIATCO was declared null and void by this Court in Agan.
The rights or privileges of an original proponent of an unsolicited proposal for an infrastructure project are never meant to be absolute. Otherwise, the original proponent can hold the Government hostage and secure the award of the infrastructure project based solely on the fact that it was the first to submit a proposal. The absurdity of such a situation becomes even more apparent when considering that the proposal is unsolicited by the Government. The rights or privileges of an original proponent depends on compliance with the procedure and conditions explicitly provided by the statutes and their IRR.
An unsolicited proposal is subject to evaluation, after which, the government agency or local government unit (LGU) concerned may accept or reject the proposal outright.
Under Section 10.6 of the IRR, the “acceptance” of the unsolicited proposal by the agency/LGU is limited to the “commitment of the [a]gency/LGU to pursue the project and recognition of the proponent as the ‘original proponent.’” Upon acceptance then of the unsolicited proposal, the original proponent is recognized as such but no award is yet made to it. The commitment of the agency/LGU upon acceptance of the unsolicited proposal is to the pursuit of the project, regardless of to whom it shall subsequently award the same. The acceptance of the unsolicited proposal only precludes the agency/LGU from entertaining other similar proposals until the solicitation of comparative proposals.
Consistent in both the statutes and the IRR is the requirement that invitations be published for comparative or competitive proposals. Therefore, it is mandatory that a public bidding be held before the awarding of the project. The negotiations between the agency/LGU and the original proponent, as provided in Section 10.9 of the IRR, is for the sole purpose of coming up with draft agreements, which shall be used in the Terms of Reference (TOR) for the solicitation of comparative proposals. Even at this point, there is no definite commitment made to the original proponent as to the awarding of the project. In fact, the same IRR provision even gives the concerned agency/LGU, in case of unresolvable differences during the negotiations, the option to reject the original proponent’s proposal and just bid out the project.
Generally, in the course of processing an unsolicited proposal, the original proponent is treated in much the same way as all other prospective bidders for the proposed infrastructure project. It is required to reformat and resubmit its proposal in accordance with the requirements of the TOR.[22] It must submit a bid bond equal to the amount and in the form required of the challengers.[23] Its qualification shall be evaluated by the concerned agency/LGU, using evaluation criteria in accordance with Rule 5[24] of the IRR, and which shall be the same criteria to be used in the TOR for the challengers.[25] These requirements ensure that the public bidding under Rule 10 of IRR on Unsolicited Proposals still remain in accord with the three principles in public bidding, which are: the offer to the public, an opportunity for competition, and a basis for exact comparison of bids.[26]
The special rights or privileges of an original proponent thus come into play only when there are other proposals submitted during the public bidding of the infrastructure project. As can be gleaned from the plain language of the statutes and the IRR, the original proponent has: (1) the right to match the lowest or most advantageous proposal within 30 working days from notice thereof, and (2) in the event that the original proponent is able to match the lowest or most advantageous proposal submitted, then it has the right to be awarded the project. The second right or privilege is contingent upon the actual exercise by the original proponent of the first right or privilege. Before the project could be awarded to the original proponent, he must have been able to match the lowest or most advantageous proposal within the prescribed period. Hence, when the original proponent is able to timely match the lowest or most advantageous proposal, with all things being equal, it shall enjoy preference in the awarding of the infrastructure project.
This is the extent of the protection that Legislature intended to afford the original proponent, as supported by the exchange between Senators Neptali Gonzales and Sergio Osmeña during the Second Reading of Senate Bill No. 1586:
Senator Gonzales:
x x x x
The
concept being that in case of an unsolicited proposal and nonetheless public
bidding has been held, then [the original proponent] shall, in effect, be
granted what is the equivalent of the right of first refusal by offering a bid
which shall equal or better the bid of the winning bidder within a period
of, let us say, 30 days from the date of bidding.
Senator Osmeña:
x x x x
To
capture the tenor of the proposal of the distinguished Gentleman, a subsequent
paragraph has to be added which says, “IF THERE IS A COMPETITIVE PROPOSAL,
THE ORIGINAL PROPONENT SHALL HAVE THE RIGHT TO EQUAL THE TERMS AND CONDITIONS
OF THE COMPETITIVE PROPOSAL.”
In
other words, if there is nobody who will submit a competitive proposal, then
nothing is lost. Everybody knows it, and
it is open and transparent. But if
somebody comes in with another proposal – and because it was the idea of the
original proponent – that proponent now has the right to equal the terms of the
original proposal.
SENATOR GONZALES:
That
is the idea, Mr. President. Because it
seems to me that it is utterly unfair for one who has conceived an idea or a
concept, spent and invested in feasibility studies, in the drawing of plans and
specifications, and the project is submitted to a public bidding, then somebody
will win on the basis of plans and specifications and concepts conceived by the
original proponent. He should at
least be given the right to submit an equalizing bid. x x x.[27]
(Emphasis ours.)
As already found by this Court in the narration of facts in Agan, AEDC failed to match the more advantageous proposal submitted by PIATCO by the time the 30-day working period expired on 28 November 1996;[28] and, without exercising its right to match the most advantageous proposal, it cannot now lay claim to the award of the project.
The bidding process as to the NAIA IPT III Project was already over after the award thereof to PIATCO, even if eventually, the said award was nullified and voided. The nullification of the award to PIATCO did not revive the proposal nor re-open the bidding. AEDC cannot insist that this Court turn back the hands of time and award the NAIA IPT III Project to it, as if the bid of PIATCO never existed and the award of the project to PIATCO did not take place. Such is a simplistic approach to a very complex problem that is the NAIA IPT III Project.
In his separate opinion in Agan, former Chief Justice Artemio V. Panganiban noted that “[T]here was effectively no public bidding to speak of, the entire bidding process having been flawed and tainted from the very outset, therefore, the award of the concession to Paircargo’s successor Piatco was void, and the Concession Agreement executed with the latter was likewise void ab initio. x x x.[29]” (Emphasis ours.) In consideration of such a declaration that the entire bidding process was flawed and tainted from the very beginning, then, it would be senseless to re-open the same to determine to whom the project should have been properly awarded to. The process and all proposals and bids submitted in participation thereof, and not just PIATCO’s, were placed in doubt, and it would be foolhardy for the Government to rely on them again. At the very least, it may be declared that there was a failure of public bidding.[30]
In addition, PIATCO is already close to finishing the building of the structures comprising NAIA IPT III,[31] a fact that this Court cannot simply ignore. The NAIA IPT III Project was proposed, subjected to bidding, and awarded as a build-operate-transfer (BOT) project. A BOT project is defined as –
A contractual arrangement whereby the project
proponent undertakes the construction, including financing, of a given
infrastructure facility, and the operation and
maintenance thereof. The project
proponent operates the facility over a fixed term during which it is allowed to
charge facility users appropriate tolls, fees, rentals, and charges not
exceeding those proposed in its bid or as negotiated and incorporated in the
contract to enable the project proponent to recover its investment, and
operating and maintenance expenses in the project. The project proponent transfers the
facility to the government agency or local government unit concerned at the end
of the fixed term that shall not exceed fifty (50) years. This shall include a supply-and-operate
situation which is a contractual arrangement whereby the supplier of equipment
and machinery for a given infrastructure facility, if the interest of the
Government so requires, operates the facility providing in the process technology
transfer and training to Filipino nationals.[32] (Emphasis ours.)
The original proposal of AEDC is for a BOT project, in which it undertook to build, operate, and transfer to the Government the NAIA IPT III facilities. This is clearly no longer applicable or practicable under the existing circumstances. It is undeniable that the physical structures comprising the NAIA IPT III Project are already substantially built, and there is almost nothing left for AEDC to construct. Hence, the project could no longer be awarded to AEDC based on the theory of legal impossibility of performance.
Neither can this Court revert to the original proposal of AEDC and award to it only the unexecuted components of the NAIA IPT III Project. Whoever shall assume the obligation to operate and maintain NAIA IPT III and to subsequently transfer the same to the Government (in case the operation is not assumed by the Government itself) shall have to do so on terms and conditions that would necessarily be different from the original proposal of AEDC. It will no longer include any undertaking to build or construct the structures. An amendment of the proposal of AEDC to address the present circumstances is out of the question since such an amendment would be substantive and tantamount to an entirely new proposal, which must again be subjected to competitive bidding.
AEDC’s offer to reimburse the Government the amount it shall pay to PIATCO for the NAIA IPT III Project facilities, as shall be determined in the ongoing expropriation proceedings before the RTC of Pasay City, cannot restore AEDC to its status and rights as the project proponent. It must be stressed that the law requires the project proponent to undertake the construction of the project, including financing; financing, thus, is but a component of the construction of the structures and not the entirety thereof.
Moreover, this
“reimbursement arrangement” may even result in the unjust enrichment of
AEDC. In its original proposal, AEDC
offered to construct the NAIA IPT III facilities for $350 million or P9
billion at that time. In exchange, AEDC
would share a certain percentage of the gross revenues with, and pay a
guaranteed annual income to the Government upon operation of the NAIA IPT III. In Gingoyon, the proferred value of
the NAIA IPT III facilities was already determined to be P3
billion. It seems improbable at this
point that the balance of the value of said facilities for which the Government
is still obligated to pay PIATCO shall reach or exceed P6 billion. There is thus the possibility that the
Government shall be required to pay PIATCO an amount less than P9
billion. If AEDC is to reimburse the
Government only for the said amount, then it shall acquire the NAIA IPT III
facilities for a price less than its original proposal of P9 billion.
Yet, per the other terms of its original proposal, it may still recoup a
capital investment of P9 billion plus a reasonable rate of return of
investment. A change in the agreed value
of the NAIA IPT III facilities already built cannot be done without a
corresponding amendment in the other terms of the original proposal as regards
profit sharing and length of operation; otherwise, AEDC will be unjustly
enriched at the expense of the Government.
Again, as aptly stated by former Chief Justice Panganiban, in his separate opinion in Agan:
If the PIATCO contracts are junked altogether as I
think they should be, should not AEDC automatically be considered the winning
bidder and therefore allowed to operate the facility? My answer is a stone-cold ‘No.’ AEDC never
won the bidding, never signed any contract, and never built any facility. Why should it be allowed to automatically
step in and benefit from the greed of another?[33]
The claim of AEDC to the award of the NAIA IPT III Project, after the award thereof to PIATCO was set aside for being null and void, grounded solely on its being the original proponent of the project, is specious and an apparent stretch in the interpretation of Section 4-A of Republic Act No. 6957, as amended by Republic Act No. 7718, and Rule 10 of the IRR.
In all, just as AEDC has no legal right to the NAIA IPT III Project, corollarily, it has no legal right over the NAIA IPT III facility. AEDC does not own the NAIA IPT III facility, which this Court already recognized in Gingoyon as owned by PIATCO; nor does AEDC own the land on which NAIA IPT III stands, which is undisputedly owned by the Republic through the Bases Conversion Development Authority (BCDA). AEDC did not fund any portion of the construction of NAIA IPT III, which was entirely funded by PIATCO. AEDC also does not have any kind of lien over NAIA IPT III or any kind of legal entitlement to occupy the facility or the land on which it stands. Therefore, nothing that the Government has done or will do in relation to the project could possibly prejudice or injure AEDC. AEDC then does not possess any legal personality to interfere with or restrain the activities of the Government as regards NAIA IPT III. Neither does it have the legal personality to demand that the Government deliver or sell to it the NAIA IPT III facility despite the express willingness of AEDC to reimburse the Government the proferred amount it had paid PIATCO and complete NAIA IPT III facility at its own cost.
AEDC invokes
the Memorandum of Agreement, purportedly executed between the DOTC and AEDC on
a. commitment of Respondent DOTC to target mid
1996 as the time frame for the formal award of the project and commencement of
site preparation and construction activities with the view of a partial opening
of the Terminal by the first quarter of 1998;
b. commitment of Respondent DOTC to pursue the
project envisioned in the unsolicited proposal and commence and conclude as
soon as possible negotiations with Petitioner AEDC on the BOT contract;
c. commitment of Respondent DOTC to make
appropriate arrangements through which the formal award of the project can be
affected[;]
d. commitment of Petitioner AEDC to a fast track
approach to project implementation and to commence negotiations with its
financial partners, investors and creditors;
e. commitment of Respondent DOTC and Petitioner
AEDC to fast track evaluation of competitive proposals, screening and
eliminating nuisance comparative bids;[34]
It is important to note, however, that the document attached as Annex “E” to the Petition of AEDC is a “certified photocopy of records on file.” This Court cannot give much weight to said document considering that its existence and due execution have not been established. It is not notarized, so it does not enjoy the presumption of regularity of a public document. It is not even witnessed by anyone. It is not certified true by its supposed signatories, Secretary Jesus B. Garcia, Jr. for DOTC and Chairman Henry Sy, Sr. for AEDC, or by any government agency having its custody. It is certified as a photocopy of records on file by an Atty. Cecilia L. Pesayco, the Corporate Secretary, of an unidentified corporation.
Even assuming for the sake of argument, that the said Memorandum of Agreement, is in existence and duly executed, it does little to support the claim of AEDC to the award of the NAIA IPT III Project. The commitments undertaken by the DOTC and AEDC in the Memorandum of Agreement may be simply summarized as a commitment to comply with the procedure and requirements provided in Rules 10 and 11 of the IRR. It bears no commitment on the part of the DOTC to award the NAIA IPT III Project to AEDC. On the contrary, the document includes express stipulations that negate any such government obligation. Thus, in the first clause,[35] the DOTC affirmed its commitment to pursue, implement and complete the NAIA IPT III Project on or before 1998, noticeably without mentioning that such commitment was to pursue the project specifically with AEDC. Likewise, in the second clause,[36] it was emphasized that the DOTC shall pursue the project under Rules 10 and 11 of the IRR of Republic Act No. 6957, as amended by Republic Act No. 7718. And most significantly, the tenth clause of the same document provided:
10. Nothing in this Memorandum of Understanding shall be
understood, interpreted or construed as permitting, allowing or authorizing the
circumvention of, or non-compliance with, or as waiving, the provisions of, and
requirements and procedures under, existing laws, rules and regulations.[37]
AEDC further decries that:
24. In carrying out its commitments under the DOTC-AEDC MOU,
Petitioner AEDC undertook the following activities, incurring in the process
tremendous costs and expenses.
a. pre-qualified 46 design and contractor firms to assist in
the NAIA-IPT III Project;
b. appointed a consortium of six (6) local banks as its
financial advisor in June 1996;
c. hired the services of GAIA South, Inc. to prepare the
Project Description Report and to obtain the Environmental Clearance
Certificate (ECC) for the NAIA-IPT III Project;
d. coordinated with the Airline Operators Association, Bases
Conversion Development Authority, Philippine Air Force, Bureau of Customs,
Bureau of Immigration, relative to their particular requirements regarding the
NAIA-IPT III [P]roject; and
e. negotiated and entered into firm commitments with Ital Thai,
Marubeni Corporation and Mitsui Corporation as equity partners.[38]
While the Court may concede that AEDC, as the original proponent, already expended resources in its preparation and negotiation of its unsolicited proposal, the mere fact thereof does not entitle it to the instant award of the NAIA IPT III Project. AEDC was aware that the said project would have to undergo public bidding, and there existed the possibility that another proponent may submit a more advantageous bid which it cannot match; in which case, the project shall be awarded to the other proponent and AEDC would then have no means to recover the costs and expenses it already incurred on its unsolicited proposal. It was a given business risk that AEDC knowingly undertook.
Additionally, the very defect upon which this Court nullified the award of the NAIA IPT III Project to PIATCO similarly taints the unsolicited proposal of AEDC. This Court found Paircargo Consortium financially disqualified after striking down as incorrect the PBAC’s assessment of the consortium’s financial capability. According to the Court’s ratio in Agan:
As the minimum project cost was estimated
to be US$350,000,000.00 or roughly P9,183,650,000.00, the Paircargo
Consortium had to show to the satisfaction of the PBAC that it had the ability
to provide the minimum equity for the project in the amount of at least P2,755,095,000.00.
x x x x
Thus, the maximum amount that Security
Bank could validly invest in the Paircargo Consortium is only P528,525,656.55,
representing 15% of its entire net worth. The total net worth therefore of the
Paircargo Consortium, after considering the maximum amounts that may be
validly invested by each of its members is P558,384,871.55 or only
6.08% of the project cost, an amount substantially less than the
prescribed minimum equity investment required for the project in the amount of P2,755,095,000.00
or 30% of the project cost.
The purpose of pre-qualification in any
public bidding is to determine, at the earliest opportunity, the ability of the
bidder to undertake the project. Thus, with respect to the bidder’s financial
capacity at the pre-qualification stage, the law requires the government agency
to examine and determine the ability of the bidder to fund the entire cost of
the project by considering the maximum amounts that each bidder may invest
in the project at the time of pre-qualification.
x x x x
Thus, if the maximum amount of equity
that a bidder may invest in the project at the time the bids are submitted
falls short of the minimum amounts required to be put up by the bidder, said
bidder should be properly disqualified. Considering that at the pre-qualification
stage, the maximum amounts which the Paircargo Consortium may invest in the
project fell short of the minimum amounts prescribed by the PBAC, we hold that
Paircargo Consortium was not a qualified bidder. Thus the award of the contract
by the PBAC to the Paircargo Consortium, a disqualified bidder, is null and
void.[39]
Pursuant to the above-quoted ruling, AEDC, like the
Paircargo Consortium, would not be financially qualified to undertake the NAIA
IPT III Project. Based on AEDC’s own
submissions to the Government, it had then a paid-in capital of only P150,000,000.00,[40] which was less than the P558,384,871.55
that Paircargo Consortium was capable of investing in the NAIA IPT III Project,
and even far less that what this Court prescribed as the minimum equity
investment required for the project in the amount of P2,755,095,000.00
or 30% of the project cost. AEDC had not
sufficiently demonstrated that it would have been financially qualified to
undertake the project at the time of submission of the bids.
Instead, AEDC took pains to present to this Court that
allowing it to take over and operate NAIA IPT III at present would be
beneficial to the Government. This Court
must point out, however, that AEDC is precisely making a new proposal befitting
the current status of the NAIA IPT III Project, contrary to its own argument
that it is merely invoking its original BOT proposal. And it is not for this Court to evaluate
AEDC’s new proposal and assess whether it would truly be most beneficial for
the Government, for the same is an executive function rather than judicial, for
which the statutes and regulations have sufficiently provided standards and
procedures for evaluation.
It can even be said that if the award of the NAIA IPT III
Project was merely a matter of choosing between PIATCO and AEDC (which it is
not), there could be no doubt that PIATCO is more qualified to operate the
structure that PIATCO itself built and PIATCO’s offer of P17.75 Billion
in annual guaranteed payments to the Government is far better that AEDC’s offer
of P135 Million.
Hence, AEDC is not entitled to a writ of mandamus, there being no specific, certain, and clear legal right to be enforced, nor duty to be performed that is clearly and peremptorily enjoined by law or by reason of official station.
PROCEDURAL LAPSES
In addition to the substantive weaknesses of the Petition of AEDC, the said Petition also suffers from procedural defects.
AEDC revived
its hope to acquire the NAIA IPT III Project when this Court promulgated its
Decision in Agan on
It must be emphasized that under Sections 2 and 3, Rule 65 of the revised Rules of Civil Procedure, petitions for prohibition and mandamus, such as in the instant case, can only be resorted to when there is no other plain, speedy and adequate remedy for the party in the ordinary course of law.
In Cruz v. Court of Appeals,[41] this Court elucidates that –
Although Rule 65 does not specify any period for the
filing of a petition for certiorari and mandamus, it must, nevertheless,
be filed within a reasonable time. In certiorari cases, the definitive rule now
is that such reasonable time is within three months from the commission
of the complained act. The same rule
should apply to mandamus cases.
The unreasonable delay in the filing of the
petitioner's mandamus suit unerringly negates any claim that the
application for the said extraordinary remedy was the most expeditious and
speedy available to the petitioner.
(Emphasis ours.)
As the revised Rules now stand, a petition for certiorari may be filed within 60 days from notice of the judgment, order or resolution sought to be assailed.[42] Reasonable time for filing a petition for mandamus should likewise be for the same period. The filing by the AEDC of its petition for mandamus 20 months after its supposed right to the project arose is evidently beyond reasonable time and negates any claim that the said petition for the extraordinary writ was the most expeditious and speedy remedy available to AEDC.
AEDC contends that the “reasonable time” within which it should have filed its petition should be reckoned only from 21 September 2005, the date when AEDC received the letter from the Office of the Solicitor General refusing to recognize the rights of AEDC to provide the available funds for the completion of the NAIA IPT III Project and to reimburse the costs of the structures already built by PIATCO. It has been unmistakable that even long before said letter – especially when the Government instituted with the RTC of Pasay City expropriation proceedings for the NAIA IPT III on 21 December 2004 – that the Government would not recognize any right that AEDC purportedly had over the NAIA IPT III Project and that the Government is intent on taking over and operating the NAIA IPT III itself.
Another strong argument against the AEDC’s Petition is that it is already barred by res judicata.
In Agan,[43] it was noted that on 16 April 1997, the AEDC instituted before the RTC of Pasig City Civil Case No. 66213, a Petition for the Declaration of Nullity of the Proceedings, Mandamus and Injunction, against the DOTC Secretary and the PBAC Chairman and members.
In Civil Case No. 66213, AEDC prayed for:
i) the nullification of the proceedings before the DOTC-PBAC,
including its decision to qualify Paircargo Consortium and to deny Petitioner
AEDC’s access to Paircargo Consortium’s technical and financial bid documents;
ii) the protection of Petitioner AEDC’s right to match
considering the void challenge bid of the Paircargo Consortium and the denial
by DOTC-PBAC of access to information vital to the effective exercise of its
right to match;
iii) the declaration of the absence of any other qualified
proponent submitting a competitive bid in an unsolicited proposal.[44]
Despite the
pendency of Civil Case No. 66213, the DOTC issued the notice of award for the
NAIA IPT III Project to PIATCO on
k) On
l) The
President’s direct intervention in the disposition of this mandamus case was a
clear imposition that Petitioner AEDC had not choice but to accept. To do otherwise was to take a confrontational
stance against the most powerful man in the country then under the risk of
catching his ire, which could have led to untold consequences upon the business
interests of the stakeholders in AEDC.
Thus, Petitioner AEDC was constrained to agree to the signing of a Joint
Motion to Dismiss and to the filing of the same in court.
m) Unbeknownst
to AEDC at that time was that simultaneous with the signing of the July 12,
1997 Concession Agreement, the DOTC and PIATCO executed a secret side agreement
grossly prejudicial and detrimental to the interest of Government. It stipulated that in the event that the
Civil Case filed by AEDC on April 16, 1997 is not resolved in a manner
favorable to the Government, PIATCO shall be entitled to full reimbursement for
all costs and expenses it incurred in order to obtain the NAIA IPT III BOT
project in an amount not less than One Hundred Eighty Million Pesos (Php
180,000,000.00). This was apparently the
reason why the President was determined to have AEDC’s case dismissed
immediately.
n) On
February 9, 1999, after the Amended and Restated Concession Agreement
(hereinafter referred to as “ARCA”) was signed without Petitioner AEDC’s
knowledge, Petitioner AEDC signed a Joint Motion to Dismiss upon the
representation of the DOTC that it would provide AEDC with a copy of the 1997
Concession Agreement. x x x.[45]
On
The parties, assisted by their respective counsel,
respectfully state:
1. Philippine International Air Terminals Company, Inc. (“PIATCO”)
and the respondents have submitted to petitioner, through the Office of the
Executive Secretary, Malacañang, a copy of the Concession Agreement which they
executed for the construction and operation of the Ninoy Aquino International
Airport International Passenger Terminal III Project (“NAIA IPT III Project),
which petitioner requested.
2. Consequently, the parties have decided to amicably settle
the instant case and jointly move for the dismissal thereof without any
of the parties admitting liability or conceding to the position taken by the
other in the instant case.
3. Petitioner, on the other hand, and the respondents, on the other
hand, hereby release and forever discharge each other from any and all
liabilities, direct or indirect, whether criminal or civil, which arose in
connection with the instant case.
4. The parties agree to bear the costs, attorney’s fees and other
expenses they respectively incurred in connection with the instant case. (Emphasis ours.)
AEDC, however, invokes the purported pressure exerted upon it by then President Joseph E. Estrada, the alleged fraud committed by the DOTC, and paragraph 2 in the afore-quoted Joint Motion to Dismiss to justify the non-application of the doctrine of res judicata to its present Petition.
The elements of res judicata, in its concept as a bar by former judgment, are as follows: (1) the former judgment or order must be final; (2) it must be a judgment or order on the merits, that is, it was rendered after a consideration of the evidence or stipulations submitted by the parties at the trial of the case; (3) it must have been rendered by a court having jurisdiction over the subject matter and the parties; and (4) there must be, between the first and second actions, identity of parties, of subject matter and of cause of action.[46] All of the elements are present herein so as to bar the present Petition.
First,
the Order of the RTC of Pasig City, dismissing Civil Case No. 66213, was issued
on
Second, the Order of the RTC of Pasig City dismissing Civil Case No. 66213 pursuant to the Joint Motion to Dismiss filed by the parties constitutes a judgment on the merits.
The Joint Motion to Dismiss stated that the parties were willing to settle the case amicably and, consequently, moved for the dismissal thereof. It also contained a provision in which the parties – the AEDC, on one hand, and the DOTC Secretary and PBAC, on the other – released and forever discharged each other from any and all liabilities, whether criminal or civil, arising in connection with the case. It is undisputable that the parties entered into a compromise agreement, defined as “a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one already commenced.[48]” Essentially, it is a contract perfected by mere consent, the latter being manifested by the meeting of the offer and the acceptance upon the thing and the cause which are to constitute the contract. Once an agreement is stamped with judicial approval, it becomes more than a mere contract binding upon the parties; having the sanction of the court and entered as its determination of the controversy, it has the force and effect of any other judgment.[49] Article 2037 of the Civil Code explicitly provides that a compromise has upon the parties the effect and authority of res judicata.
Because of the compromise agreement among the parties, there was accordingly a judicial settlement of the controversy, and the Order, dated 30 April 1999, of the RTC of Pasig City was no less a judgment on the merits which may be annulled only upon the ground of extrinsic fraud.[50] Thus, the RTC of Pasig City, in the same Order, correctly granted the dismissal of Civil Case No. 66213 with prejudice.
A scrutiny of the Joint Motion to Dismiss submitted to the RTC of Pasig City would reveal that the parties agreed to discharge one another from any and all liabilities, whether criminal or civil, arising from the case, after AEDC was furnished with a copy of the 1997 Concession Agreement between the DOTC and PIATCO. This complete waiver was the reciprocal concession of the parties that puts to an end the present litigation, without any residual right in the parties to litigate the same in the future. Logically also, there was no more need for the parties to admit to any liability considering that they already agreed to absolutely discharge each other therefrom, without necessarily conceding to the other’s position. For AEDC, it was a declaration that even if it was not conceding to the Government’s position, it was nonetheless waiving any legal entitlement it might have to sue the Government on account of the NAIA IPT III Project. Conversely, for the Government, it was an avowal that even if it was not accepting AEDC’s stance, it was all the same relinquishing its right to file any suit against AEDC in connection with the same project. That none of the parties admitted liability or conceded its position is without bearing on the validity or binding effect of the compromise agreement, considering that these were not essential to the said compromise.
Third, there is no question as to the jurisdiction of the RTC of Pasig City over the subject matter and parties in Civil Case No. 66213. The RTC can exercise original jurisdiction over cases involving the issuance of writs of certiorari, prohibition, mandamus, quo warranto, habeas corpus and injunction.[51] To recall, the Petition of AEDC before the RTC of Pasig City was for the declaration of nullity of proceedings, mandamus and injunction. The RTC of Pasig City likewise had jurisdiction over the parties, with the voluntary submission by AEDC and proper service of summons on the DOTC Secretary and the PBAC Chairman and members.
Lastly, there is, between Civil Case No. 66213 before the RTC of Pasig City and the Petition now pending before this Court, an identity of parties, of subject matter, and of causes of action.
There is an identity of parties. In both petitions, the AEDC is the petitioner. The respondents in Civil Case No. 66213 are the DOTC Secretary and the PBAC Chairman and members. The respondents in the instant Petition are the DOTC, the DOTC Secretary, and the Manila International Airport Authority (MIAA). While it may be conceded that MIAA was not a respondent and did not participate in Civil Case No. 66213, it may be considered a successor-in-interest of the PBAC. When Civil Case No. 66213 was initiated, PBAC was then in charge of the NAIA IPT III Project, and had the authority to evaluate the bids and award the project to the one offering the lowest or most advantageous bid. Since the bidding is already over, and the structures comprising NAIA IPT III are now built, then MIAA has taken charge thereof. Furthermore, it is clear that it has been the intention of the AEDC to name as respondents in their two Petitions the government agency/ies and official/s who, at the moment each Petition was filed, had authority over the NAIA IPT III Project.
There is an identity of subject matter because the two Petitions involve none other than the award and implementation of the NAIA IPT III Project.
There is an identity of cause of action because, in both Petitions, AEDC is asserting the violation of its right to the award of the NAIA IPT III Project as the original proponent in the absence of any other qualified bidders. As early as in Civil Case No. 66213, AEDC already sought a declaration by the court of the absence of any other qualified proponent submitting a competitive bid for the NAIA IPT III Project, which, ultimately, would result in the award of the said project to it.
AEDC attempts
to evade the effects of its compromise agreement by alleging that it was
compelled to enter into such an agreement when former President Joseph E.
Estrada asserted his influence and intervened in Civil Case No. 66213. This allegation deserves scant
consideration. Without any proof that
such events did take place, such statements remain mere allegations that cannot
be given weight. One who alleges any
defect or the lack of a valid consent to a contract must establish the same by
full, clear and convincing evidence, not merely by preponderance thereof.[52] And, even assuming arguendo, that the
consent of AEDC to the compromise agreement was indeed vitiated, then President
Estrada was removed from office in January 2001. AEDC filed the present Petition only on
The AEDC further claims that
the DOTC committed fraud when, without AEDC’s knowledge, the DOTC entered into
an Amended and Restated Concession Agreement (ARCA) with PIATCO. The fraud on the part of the DOTC purportedly
also vitiated AEDC’s consent to the compromise agreement. It is true that a judicial compromise may be
set aside if fraud vitiated the consent of a party thereof; and that the
extrinsic fraud, which nullifies a compromise, likewise invalidates the
decision approving it.[54] However, once again,
AEDC’s allegations of fraud are unsubstantiated. There is no proof that the DOTC and PIATCO
willfully and deliberately suppressed and kept the information on the execution
of the ARCA from AEDC. The burden of
proving that there indeed was fraud lies with the party making such
allegation. Each party must prove his
own affirmative allegations. The burden
of proof lies on the party who would be defeated if no evidence were given on
either side. In this jurisdiction, fraud
is never presumed.[55]
Moreover, a judicial compromise
may be rescinded or set aside on the ground of fraud in accordance with Rule 38
of the Rules on Civil Procedure on petition for relief from judgment. Section 3 thereof prescribes the periods
within which the petition for relief must be filed:
SEC. 3. Time for filing petition; contents and
verification.– A petition provided for in either of the preceding sections
of this Rule must be verified, filed within sixty (60) days after the
petitioner learns of the judgment, final order or other proceeding to be set
aside, and not more than six (6) months after such judgment or final order was
entered, or such proceeding was taken, and must be accompanied with affidavits
showing the fraud, accident, mistake or excusable negligence relied upon, and
the facts constituting the petitioner’s good and substantial cause of action or
defense, as the case may be.
According to this Court’s
ruling in Argana v. Republic,[56] as applied to a judgment
based on compromise, both the 60-day and six-month reglementary periods within
which to file a petition for relief should be reckoned from the date when the
decision approving the compromise agreement was rendered because such judgment
is considered immediately executory and entered on the date that it was
approved by the court. In the present
case, the Order of the RTC of Pasig City granting the Joint Motion to Dismiss
filed by the parties in Civil Case No. 66213 was issued on 30 April 1999, yet AEDC
only spoke of the alleged fraud which vitiated its consent thereto in its
Petition before this Court filed on 20 October 2005, more than six years
later.
It is obvious that the assertion by AEDC of its vitiated consent to the Joint Motion to Dismiss Civil Case No. 66213 is nothing more than an after-thought and a desperate attempt to escape the legal implications thereof, including the barring of its present Petition on the ground of res judicata.
It is also irrelevant to the legal position of AEDC that the Government asserted in Agan that the award of the NAIA IPT III Project to PIATCO was void. That the Government eventually took such a position, which this Court subsequently upheld, does not affect AEDC’s commitments and obligations under its judicially-approved compromise agreement in Civil Case No. 66213, which AEDC signed willingly, knowingly, and ably assisted by legal counsel.
In addition, it cannot be said that there has been a fundamental change in the Government’s position since Civil Case No. 66213, contrary to the allegation of AEDC. The Government then espoused that AEDC is not entitled to the award of the NAIA IPT III Project. The Government still maintains the exact same position presently. That the Government eventually reversed its position on the validity of its award of the project to PIATCO is not inconsistent with its position that neither should AEDC be awarded the project.
For the foregoing substantive and procedural reasons, the instant Petition of AEDC should be dismissed.
Republic
of the
As mentioned in Gingoyon, expropriation proceedings for the NAIA IPT III was instituted by the Government with the RTC of Pasay City, docketed as Case No. 04-0876CFM. Congressman Baterina, together with other members of the House of Representatives, sought intervention in Case No. 04-0876CFM by filing a Petition for Prohibition in Intervention (with Application for Temporary Restraining Order and Writ of Preliminary Injunction). Baterina, et al. believe that the Government need not file expropriation proceedings to gain possession of NAIA IPT III and that PIATCO is not entitled to payment of just compensation, arguing thus –
A) Respondent PIATCO does not own Terminal III because BOT Contracts do not vest ownership in PIATCO. As such, neither PIATCO nor FRAPORT are entitled to compensation.
B) Articles 448, ET SEQ., of the New Civil Code, as regards builders in good faith/bad faith, do not apply to PIATCO’s Construction of Terminal III.
C) Article 1412(2) of the New Civil Code allows the Government to demand the return of what it has given without any obligation to comply with its promise.
D) The payment of compensation to PIATCO is unconstitutional, violative of the Build-Operate-Transfer Law, and violates the Civil Code and other laws. [57]
On
In the
meantime, on
On
WHEREFORE, let a writ of execution be issued in this
case directing the Sheriff of this court to immediately implement the Order
dated January 4, 2005 and January 10, 2005, as affirmed by the Decision of the
Supreme Court in G.R. No. 166429 in the above-entitled case dated December 19,
2005, in the following manner:
1. Ordering the General Manager, the Senior Assistant General Manager
and the Vice President of Finance of the Manila International Airport Authority
(MIAA) to immediately withdraw the amount of P3,002,125,000.00 from the
above-mentioned Certificates of US Dollar Time Deposits with the Land Bank of
the Philippines, Baclaran Branch;
2. Ordering the Branch Manager, Land Bank of the P3,002,125,000.00
to PIATCO;
Return of Service of the Writs
shall be made by the Sheriff of this court immediately thereafter;[58]
The
RTC of Pasay City, in an Order, dated
During
the pendency of CA-G.R. No. 95539 with the Court of Appeals, the RTC of Pasay
City issued an Order, dated 7 August 2006, denying the Urgent Manifestation and
Motion filed by the Republic in which it relayed willingness to comply with the
Order and Writ of Execution dated 27 March 2006, provided that the trial court
shall issue an Order expressly authorizing the Republic to award concessions
and lease portions of the NAIA IPT III to potential users. The following day, on P3,002,125,000.00
from the Land Bank of the
By
While the Urgent Motion to lift the TRO was still pending with the Court of Appeals, the Republic already filed the present Petition for Certiorari and Prohibition With Urgent Application for a Temporary Restraining Order and/or Writ of Preliminary Injunction, attributing to the Court of Appeals grave abuse of discretion in granting the TRO and seeking a writ of prohibition against the Court of Appeals to enjoin it from giving due course to Baterina’s Petition in CA-G.R. No. 95539. The Republic thus raises before this Court the following arguments:
I
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO AN EXCESS OR LACK OF JURISDICTION WHEN IT GRANTED THE
TEMPORARY RESTRAINING ORDER.
A.
THIS HONORABLE
COURT’S DECISION IN GINGOYON CONSTITUTES THE “LAW OF THE CASE”.
B.
THE TRO IS IN
DIRECT CONTRAVENTION OF THIS COURT’S DECISION WICH HAD ATTAINED FINALITY.
II
THE REPUBLIC IS SUFFERING IRREPARABLE DAMAGE.
III
THE COURT OF APPEALS MUST BE PROHIBITED FROM GIVING
DUE COURSE TO A PETITION THAT IS DEFECTIVE IN FORM AND SUBSTANCE.
A.
PRIVATE
RESPONDENT HAS NO LEGAL STANDING.
1.
THIS HONORABLE
COURT HAS RULED THAT PRIVATE RESPONDENT HAS NO LEGAL STANDING.
2.
PRIVATE
RESPONDENT HAS LOST HIS STANDING AS AN INTERVENOR.
B.
PRIVATE
RESPONDENT FAILED TO DEMONSTRATE THAT HE IS ENTITLED TO THE INJUNCTIVE RELIEFS
PRAYED FOR.
C.
THE BOND POSTED
IS INSUFFICIENT.
IV
GRANTING ARGUENDO THAT PRIVATE RESPONDENT’S PETITION
IS SUFFICIENT IN FORM AND SUBSTANCE, THE SAME HAS BECOME MOOT AND ACADEMIC.
A.
THE MOTION TO
DECLARE IN DEFAULT AND/OR MOTION FOR PARTIAL SUMMARY JUDGMENT HAS ALREADY BEEN
RESOLVED.
B.
PIATCO HAS
CATEGORICALLY DISPUTED THE PROFFERED VALUE FOR NAIA TERMINAL III.[59]
The Republic prays of this Court that:
(a) Pending the determination of the merits of this petition, a
temporary restraining order and/or a writ of preliminary injunction be ISSUED
restraining the Court of Appeals from implementing the writ of preliminary
injunction in CA-G.R. SP No. 95539 and proceeding in said case such as hearing
it on
(b) The Resolution date
(c) CA-G.R. SP No. 95539 be ORDERED DISMISSED.
Other just and equitable
reliefs are likewise prayed for.[60]
On
In view of the pronouncement
of the Supreme Court in the Gingoyon case upholding the right of PIATCO to be
paid the proferred value in the amount of P3,002,125,000.00 prior to the
implementation of the writ of possession issued by the trial court on December
21, 2004 over the NAIA Passenger Terminal III, and directing the determination
of just compensation, there is no practical and logical reason to maintain the
effects of the Temporary Restraining Order contained in our Resolution dated
August 24, 2006. Thus, We cannot
continue restraining what has been mandated in a final and executory decision
of the Supreme Court.
WHEREFORE, Our Resolution
dated
There
being no more legal impediment, the Republic tendered on 11 September 2006 Land
Bank check in the amount of P3,002,125,000.00 representing the proferred
value of NAIA IPT III, which was received by a duly authorized representative
of PIATCO.
On
The latest developments before the Court of Appeals and the RTC of Pasay City render the present Petition of the Republic moot.
Nonetheless, Baterina, as the private respondent in the instant Petition, presented his own prayer that a judgment be rendered as follows:
A. For this Honorable Court, in the exercise of its judicial
discretion to relax procedural rules consistent with Metropolitan Traffic
Command v. Gonong and deem that justice would be better served if all legal
issues involved in the expropriation case and in Baterina are resolved
in this case once and for all, to DECLARE that:
i.
TERMINAL 3, as a
matter of law, is public property and thus not a proper object of eminent
domain proceedings; and
ii.
PIATCO, as a
matter of law, is merely the builder of TERMINAL 3 and, as such, it may file a
claim for recovery on quantum meruit with the Commission on Audi[t] for
determination of the amount thereof, if any.
B. To DIRECT the
C. To DISMISS the instant Petition and DENY The
Republic’s application for TRO and/or writ of preliminary injunction for lack
of merit;
D. To DECLARE that the P3 Billion (representing the
proferred value of TERMINAL 3) paid to PIATCO on 11 September 2006 as funds
held in trust by PIATCO for the benefit of the Republic and subject to
the outcome of the proceedings for the determination of recovery on quantum
meruit due to PIATCO, if any.
E. To
DIRECT the Solicitor General to disclose the evidence it has gathered on
corruption, bribery, fraud, bad faith, etc., to this Honorable Court and
the Commission on Audit, and to DECLARE such evidence to be admissible
in any proceeding for the determination of any compensation due to PIATCO, if
any.
[F]. In the alternative, to:
i.
SET ASIDE the trial court’s Order dated 08 August 2006
denying Private Respondent’s motion for intervention in the expropriation case,
and
ii.
Should this
Honorable Court lend credence to the argument of the Solicitor General in its Comment
dated 20 April 2006 that “there are issues as to material fact that require
presentation of evidence”, to REMAND the resolution of the legal issues
raised by Private Respondent to the trial court consistent with this Honorable Court’s
holding in the Gingoyon Resolution that “the interests of the
movants-in-intervention [meaning Takenaka, Asahikosan, and herein Private
Respondent] may be duly litigated in proceedings which are extant before the
lower courts.”[62]
In essence, Baterina is opposing the expropriation proceedings on the ground that NAIA IPT III is already public property. Hence, PIATCO is not entitled to just compensation for NAIA IPT III. He is asking the Court to make a definitive ruling on this matter considering that it was not settled in either Agan or Gingoyon.
We disagree. Contrary to Baterina’s stance, PIATCO’s entitlement to just and equitable consideration for its construction of NAIA IPT III and the propriety of the Republic’s resort to expropriation proceedings were already recognized and upheld by this Court in Agan and Gingoyon.
The Court’s
Decisions in both Agan and Gingoyon had attained finality, the
former on
This Court already made an unequivocal pronouncement in its Resolution dated 21 January 2004 in Agan that for the Government of the Republic to take over the NAIA IPT III facility, it has to compensate PIATCO as a builder of the structures; and that “[t]he compensation must be just and in accordance with law and equity for the government cannot unjustly enrich itself at the expense of PIATCO and its investors.”[63] As between the Republic and PIATCO, the judgment on the need to compensate PIATCO before the Government may take over NAIA IPT III is already conclusive and beyond question.
Hence, in Gingoyon,
this Court declared that:
This pronouncement contains the fundamental premises which permeate this decision of the Court. Indeed, Agan, final and executory as it is, stands as governing law in this case, and any disposition of the present petition must conform to the conditions laid down by the Court in its 2004 Resolution.
x x x x
The
pronouncement in the 2004 Resolution is especially significant to this case in
two aspects, namely: (i) that PIATCO must receive payment of just compensation
determined in accordance with law and equity; and (ii) that the government is
barred from taking over NAIA 3 until such just compensation is paid. The
parties cannot be allowed to evade the directives laid down by this Court
through any mode of judicial action, such as the complaint for eminent domain.
It cannot be denied though that the Court in the 2004 Resolution prescribed mandatory guidelines which the Government must observe before it could acquire the NAIA 3 facilities. Thus, the actions of respondent judge under review, as well as the arguments of the parties must, to merit affirmation, pass the threshold test of whether such propositions are in accord with the 2004 Resolution.[64]
The Court then, in Gingoyon, directly addressed the issue on the appropriateness of the Republic’s resort to expropriation proceedings:
The
Government has chosen to resort to expropriation, a remedy available under the
law, which has the added benefit of an integrated process for the
determination of just compensation and the payment thereof to PIATCO. We
appreciate that the case at bar is a highly unusual case, whereby the
Government seeks to expropriate a building complex constructed on land which
the State already owns. There is an inherent illogic in the resort to eminent
domain on property already owned by the State. At first blush, since the State
already owns the property on which NAIA 3 stands, the proper remedy should be
akin to an action for ejectment.
However, the reason for the resort by the Government to expropriation proceedings is understandable in this case. The 2004 Resolution, in requiring the payment of just compensation prior to the takeover by the Government of NAIA 3, effectively precluded it from acquiring possession or ownership of the NAIA 3 through the unilateral exercise of its rights as the owner of the ground on which the facilities stood. Thus, as things stood after the 2004 Resolution, the right of the Government to take over the NAIA 3 terminal was preconditioned by lawful order on the payment of just compensation to PIATCO as builder of the structures.
x x x x
The
right of eminent domain extends to personal and real property, and the NAIA 3
structures, adhered as they are to the soil, are considered as real property.
The public purpose for the expropriation is also beyond dispute. It should also
be noted that Section 1 of Rule 67 (on Expropriation) recognizes the
possibility that the property sought to be expropriated
may be titled in the name of the Republic of the Philippines, although occupied
by private individuals, and in such case an averment to that effect should
be made in the complaint. The instant expropriation complaint did aver that the
NAIA 3 complex “stands on a parcel of land owned by the Bases Conversion
Development Authority, another agency of [the Republic of the
Admittedly,
eminent domain is not the sole judicial recourse by which the Government
may have acquired the NAIA 3 facilities while satisfying the requisites in the
2004 Resolution. Eminent domain though may be the most effective, as well as
the speediest means by which such goals may be accomplished. Not only does
it enable immediate possession after satisfaction of the requisites under the
law, it also has a built-in procedure through which just compensation may be
ascertained. Thus, there should be no question as to the propriety of eminent
domain proceedings in this case.
Still, in applying the laws and rules on expropriation in the case at bar, we are impelled to apply or construe these rules in accordance with the Court’s prescriptions in the 2004 Resolution to achieve the end effect that the Government may validly take over the NAIA 3 facilities. Insofar as this case is concerned, the 2004 Resolution is effective not only as a legal precedent, but as the source of rights and prescriptions that must be guaranteed, if not enforced, in the resolution of this petition. Otherwise, the integrity and efficacy of the rulings of this Court will be severely diminished.[65] (Emphasis ours.)
The
Court, also in Gingoyon, categorically recognized PIATCO’s ownership
over the structures it had built in NAIA IPT III, to wit:
There can be no doubt that PIATCO has ownership rights over the facilities which it had financed and constructed. The 2004 Resolution squarely recognized that right when it mandated the payment of just compensation to PIATCO prior to the takeover by the Government of NAIA 3. The fact that the Government resorted to eminent domain proceedings in the first place is a concession on its part of PIATCO’s ownership. Indeed, if no such right is recognized, then there should be no impediment for the Government to seize control of NAIA 3 through ordinary ejectment proceedings.
x x x x
Thus, the property subject of expropriation, the NAIA 3 facilities, are real property owned by PIATCO. x x x (Emphasis ours.)[66]
It was further settled in Gingoyon
that the expropriation proceedings shall be held in accordance
with Republic Act No. 8974,[67]
thus:
Unlike in the case of Rule 67, the application of Rep. Act No. 8974 will not contravene the 2004 Resolution, which requires the payment of just compensation before any takeover of the NAIA 3 facilities by the Government. The 2004 Resolution does not particularize the extent such payment must be effected before the takeover, but it unquestionably requires at least some degree of payment to the private property owner before a writ of possession may issue. The utilization of Rep. Act No. 8974 guarantees compliance with this bare minimum requirement, as it assures the private property owner the payment of, at the very least, the proffered value of the property to be seized. Such payment of the proffered value to the owner, followed by the issuance of the writ of possession in favor of the Government, is precisely the schematic under Rep. Act No. 8974, one which facially complies with the prescription laid down in the 2004 Resolution.
And
finally, as to the determination of the amount due PIATCO, this Court ruled in Gingoyon
that:
Under
Rep. Act No. 8974, the Government is required to “immediately pay” the owner of
the property the amount equivalent to the sum of (1) one hundred percent (100%)
of the value of the property based on the current relevant zonal valuation of
the [BIR]; and (2) the value of the improvements and/or structures as
determined under Section 7. As stated above, the BIR zonal valuation cannot
apply in this case, thus the amount subject to immediate payment should be
limited to “the value of the improvements and/or structures as determined under
Section 7,” with Section 7 referring to the “implementing rules and regulations
for the equitable valuation of the improvements and/or structures on the land.”
Under the present implementing rules in place, the valuation of the
improvements/structures are to be based using “the replacement cost method.”
However, the replacement cost is only one of the factors to be
considered in determining the just compensation.
In
addition to Rep. Act No. 8974, the 2004 Resolution in Agan also
mandated that the payment of just compensation should be in accordance
with equity as well. Thus, in ascertaining the ultimate amount of just
compensation, the duty of the trial court is to ensure that such amount
conforms not only to the law, such as Rep. Act No. 8974, but to principles of
equity as well.
Admittedly,
there is no way, at least for the present, to immediately ascertain the value
of the improvements and structures since such valuation is a matter for factual
determination. Yet Rep. Act No. 8974 permits an expedited means by which the
Government can immediately take possession of the property without having to
await precise determination of the valuation. Section 4(c) of Rep. Act No. 8974
states that “in case the completion of a government infrastructure project is
of utmost urgency and importance, and there is no existing valuation of the
area concerned, the implementing agency shall immediately pay the owner of
the property its proferred value, taking into consideration the
standards prescribed in Section 5 [of the law].” The “proffered value”
may strike as a highly subjective standard based solely on the intuition of the
government, but Rep. Act No. 8974 does provide relevant standards by which
“proffered value” should be based, as well as the certainty of judicial determination of
the propriety of the proffered value.
In
filing the complaint for expropriation, the Government alleged to have
deposited the amount of P3 Billion earmarked for expropriation,
representing the assessed value of the property. The making of the
deposit, including the determination of the amount of the deposit, was
undertaken under the erroneous notion that Rule 67, and not Rep. Act No. 8974,
is the applicable law. Still, as regards the amount, the Court sees no
impediment to recognize this sum of P3 Billion as the proffered value
under Section 4(b) of Rep. Act No. 8974. After all, in the initial
determination of the proffered value, the Government is not strictly required
to adhere to any predetermined standards, although its proffered value may
later be subjected to judicial review using the standards enumerated under
Section 5 of Rep. Act No. 8974.[68]
Gingoyon constitutes as the law of the case for the expropriation proceedings, docketed as Case No. 04-0876CFM, before the RTC of Pasay City. Law of the case has been defined in the following manner –
By "law of the case" is meant that
"whatever is once irrevocably established as the controlling legal rule or
decision between the same parties in the same case continues to be the law of
the case" so long as the "facts on which such decision was predicated
continue to be the facts of the case before the court" (21 C.J.S. 330).
And once the decision becomes final, it is binding on all inferior courts and
hence beyond their power and authority to alter or modify (Kabigting vs.
Acting Director of Prisons, G.R. L-15548, October 30, 1962).[69]
A ruling
rendered on the first appeal, constitutes the law of the case, and, even if erroneous,
it may no longer be disturbed or modified since it has become final long ago.[70]
The
extensive excerpts from Gingoyon demonstrate and emphasize that the
Court had already adjudged the issues raised by Baterina, which he either
conveniently overlooked or stubbornly refused to accept.
The general
rule precluding the relitigation of material facts or questions which were in
issue and adjudicated in former action are commonly applied to all matters
essentially connected with the subject matter of the litigation. Thus, it extends to questions necessarily
involved in an issue, and necessarily adjudicated, or necessarily implied in
the final judgment, although no specific finding may have been made in
reference thereto, and although such matters were directly referred to in the
pleadings and were not actually or formally presented. Under this rule, if the record of the former
trial shows that the judgment could not have been rendered without deciding the
particular matter, it will be considered as having settled that matter as to
all future actions between the parties and if a judgment necessarily
presupposes certain premises, they are as conclusive as the judgment itself. Reasons for the rule are that a judgment is
an adjudication on all the matters which are essential to support it, and that
every proposition assumed or decided by the court leading up to the final
conclusion and upon which such conclusion is based is as effectually passed
upon as the ultimate question which is finally solved.[71]
Since the
issues Baterina wishes to raise as an intervenor in Case No. 04-0876CFM were
already settled with finality in both Agan and Gingoyon, then
there is no point in still allowing his intervention. His Petition-in-Intervention would only be a
relitigation of matters that had been previously adjudicated by no less than
the Highest Court of the land. And, in
no manner can the RTC of Pasay City in Case No. 04-0876CFM grant the reliefs he
prayed for without departing from or running afoul of the final and executory
Decisions of this Court in Agan and Gingoyon.
While it is
true that when this Court, in a Resolution dated
WHEREFORE, in view of the foregoing:
a. The Petition in G.R. No. 169914 is hereby DISMISSED for lack of merit; and
b. The Petition in G.R. No. 174166 is hereby likewise DISMISSED for being moot and academic.
No costs.
SO ORDERED.
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MINITA V. CHICO-NAZARIO
Associate Justice |
WE
CONCUR:
LEONARDO
A. QUISUMBING
Associate Justice
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CONSUELO YNARES-SANTIAGO
Associate Justice |
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No part
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ANTONIO T. CARPIO Associate Justice |
MA. ALICIA
AUSTRIA-MARTINEZ Associate Justice |
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RENATO C. CORONA
Associate Justice |
CONCHITA CARPIO MORALES
Associate Justice |
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No part
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ADOLFO S. AZCUNA
Associate Justice
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DANTE O. TINGA
Associate Justice
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No part
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PRESBITERO
J. VELASCO, JR.
Associate Justice |
ANTONIO EDUARDO B. NACHURA Associate Justice |
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No part
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RUBEN T. REYES
Associate Justice
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TERESITA
J. LEONARDO-DE CASTRO Associate Justice |
ARTURO D. BRION
Associate Justice
Pursuant
to Article VIII, Section 13 of the Constitution, it is hereby certified that
the conclusions in the above Decision were reached in consultation before the
case was assigned to the writer of the opinion of the Court.
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REYNATO S. PUNO
Chief Justice
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* On leave.
[1] Decision, 450 Phil. 744 (2003); The Resolution on the Motion for Reconsideration, 465 Phil. 545 (2004).
[2]
Decision, G.R. No. 166429,
[3] Decision, Agan, Jr. v. Philippine International Air Terminals Co., Inc., supra note 1 at 788-798.
[4]
[5]
[6]
[7]
[8] Resolution on the Motion for Reconsideration, supra note 1.
[9] Identified as employees of PIATCO, other workers of NAIA IPT III, and Nagkaisang Maralita ng Tañong Association, Inc. (NMTAI), id. at 580-581.
[10]
[11] Decision, Republic v. Gingoyon, supra note 2 at 506-510.
[12]
[13]
[14] Resolution, Republic v. Gingoyon,
supra note 2 at 469-470.
[15]
[16] Rollo of G.R. No. 169914, pp. 58-59.
[17]
[18] Sanson v. Barrios, 63 Phil. 198, 202 (1936).
[19] Isada v. Judge Bocar, 159 Phil. 57, 67 (1975).
[20] An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector, and for other Purposes.
[21] CP-Senate TSP,
[22] Section 10.9 of the IRR.
[23] Section 10.12 of the IRR.
[24] On qualification of bidders.
[25] Section 10.13 of the IRR.
[26]
[27] CP-Senate TSP,
[28] Decision, Agan, Jr. v. Philippine International Air Terminals Co., Inc., supra note 1 at 794.
[29]
[30] Section 11.9 of the IRR provides that, “When no complying bids are received or in case of failure to execute the contract with a qualified and contracting bidder due to the refusal of the latter, the bidding shall be declared a failure. In such cases, the project shall be subjected to a rebidding.
[31] Resolution, Agan, Jr. v. Philippine International Air Terminals Co., Inc., supra note 1, at 603.
[32] Section 1.3(c)(iii), Rule 1, of the IRR of Republic Act No. 6957.
[33] Decision, Agan, Jr. v. Philippine International Air Terminals Co., Inc., supra note 1 at 899.
[34] Petition, G.R. No. 169914, pp. 14-15
[35] The first stipulation in the Memorandum of Agreement exactly reads:
1. The DOTC, on its own behalf and in representation of the [Government of the Philippines (GOP)], hereby represents that the NAIA IPT 3 project is consistent with the development program of the DOTC and the GOP, and the Government is unequivocally committed to pursue, implement and complete the same on or before the year 1998. (Rollo, pp. 107.)
[36] The second stipulation in the Memorandum of Agreement is reproduced below:
2. The DOTC
will undertake the NATIA IPT 3 Project under R.A. No. 6937 as amended by R.A.
No. 7718 and its IRR. Having officially
secured ICC approval of the unsolicited proposal of AEDC, the DOTC commits to
pursue the project under Rules 10 and 11 of the IRR, subject to the existing
laws, rules and regulations applicable or relevant thereto. (
[37]
[38] Petition, Rollo of G.R. No. 169914, p. 22.
[39] Decision, Agan, Jr. v. PIATCO, supra note 1 at pp. 809-813.
[40] Rollo of G.R. No. 169914, p. 84.
[41] 322 Phil. 649, 664-665 (1996).
[42] Revised Rules of Civil Procedure, Rule 65, Section 3.
[43] Decision, Agan, Jr. v. Philippine International Air Terminals Co., Inc., supra note 1 at 794.
[44] Petition, Rollo of G.R. No. 169914, pp. 26-27.
[45]
[46] Vda. de Cruz v. Carriaga, G.R. No. 75109-10,
[47] Spouses Magat v. Spouses Delizo, 413 Phil. 24, 31-32 (2001).
[48] Civil Code, Article 2028.
[49] Domingo v. Court of Appeals,
G.R. No. 102360,
[50] Varela v. Villanueva, 95 Phil. 248, 262 (1954).
[51] Batas Pambansa Blg. 129, otherwise known as The Judiciary Reorganization Act of 1980, Section 21 (1).
[52] Cenido v. Apacionado, G.R.
No. 132474,
[53] According to Article 1391 of the Civil Code, the action for annulment shall be brought within four years.
This period shall begin:
In cases of intimidation, violence or undue influence, from the time the defect of the consent ceases.
In case of mistake or fraud, from the time of the discovery of the same.
And when the action refers to contracts entered into by minors or other incapacitated persons, from the time the guardianship ceases.
[54] Olego v. Rebueno, 160-A Phil. 592, 602-603 (1975).
[55]
Benitez v. Intermediate
Appellate Court, G.R. No. L-71535,
[56] G.R. No. 147227,
[57] Rollo
of G.R. No. 174166, Vol. I, p. 121.
[58] Rollo of G.R. No. 174166, Vol. I, pp. 238-240.
[59] Rollo of G.R. No. 174166, Vol. I, pp. 34-36.
[60]
[61]
[62]
[63] Supra note 10.
[64] Decision, Republic v. Gingoyon, supra note 2 at 511-512.
[65]
[66]
[67]
An Act to Facilitate the
Acquisition of Right-of-Way, Site or Location for National Government
Infrastructure Projects and for other Purposes.
[68]
[69] People’s Homesite and Housing Corporation v. Mencias, 127 Phil. 448, 460 (1967).
[70] People v. Olarte, 125 Phil. 895,899 (1967).
[71] Smith Bell & Co. (Phils.), Inc. v. Court of Appeals, G.R. No. 56294, 20 May 1991, 197 SCRA 201, 210.