SPECIAL EN BANC

Agenda of June 13, 2012

Item No. 191

G.R. No. 201112 (ARCHBISHOP FERNANDO R. CAPALLA, OMAR SOLITARIO ALI and MARY ANNE L. SUSANO, Petitioners, -versus- THE HONORABLE COMMISSION ON ELECTIONS, Respondent.)

G.R. No. 201121 (SOLIDARITY FOR SOVEREIGNTY [S4S], represented by Ma. Linda Olaguer, RAMON PEDROSA, BENJAMIN PAULINO, SR., EVELYN CORONEL, MA. LINDA OLAGUER MONTAYRE and NELSON T. MONTAYRE, Petitioners, -versus- COMMISSION ON ELECTIONS, Respondent.)

G.R. No. 201127 (TEOFISTO T. GUINGONA, BISHOP BRODERICK S. PABILLO, SOLITA COLLAS MONSOD, MARIA CORAZON MENDOZA ACOL, FR. JOSE DIZON, NELSON JAVA CELIS, PABLO R. MANALASTAS, GEORGINA R. ENCANTO and ANNA LEAH E. COLINA, Petitioners, -versus- COMMISSION ON ELECTIONS and SMARTMATIC-TIM CORPORATION, Respondents.)

G.R. No. 201413 (TANGGULANG DEMOKRASYA [TAN DEM], INC., EVELYN L. KILAYKO, TERESITA D. BALTAZAR, PILAR L. CALDERON and ELITA T. MONTILLA, Petitioners, -versus- COMMISSION ON ELECTIONS and SMARTMATIC-TIM CORPORATION, Respondents.)

Promulgated:

June 13, 2012

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CONCURRING OPINION

LEONARDO-DE CASTRO, J.:

I concur fully with the ponencia of the Honorable Associate Justice Diosdado M. Peralta after a careful consideration, among others, of the stipulations in the Contract for the Provision of the Automated Election System (AES) for the May 10, 2010 synchronized National and Local Elections (AES Contract, for brevity) and the undisputed facts relevant thereto.

I deemed it necessary to explain the legal basis of my concurrence with the majority opinion in view of the points of law which I raised in the course of the oral arguments in these cases, particularly those relating to the period within which the COMELEC shall exercise the option to purchase (OTP) the goods listed in Annex L of the AES Contract. The latter pertinently provides:

Article 6

COMELECs Responsibilities

x x x x

6.6. The COMELEC shall notify the PROVIDER on or before 31 December 2010 of its option to purchase the Goods as listed in Annex L.

Questions were raised as to the validity of the extension of the OTP period agreed upon by the parties to the contract long after December 31, 2010. The Agreement on the Extension of the OTP under the AES Contract was signed only on March 30, 2012. Nonetheless, I have come to the conclusion that such an extension of the period to exercise the OTP was legal and valid.

It is important to consider that the OTP stipulation is an integral part of the AES Contract, which as of March 30, 2012 was still in effect, pursuant to Article 2 of the said Contract which reads:

Article 2

EFFECTIVITY

2.1. This Contract shall take effect upon the fulfillment of all of the following conditions:

a) Submission by the PROVIDER of the Performance Security;

b) Signing of this Contract in seven (7) copies by the parties; and

c) Receipt by the PROVIDER of the Notice to Proceed

2.2. The Term of this Contract begins from the date of effectivity until the release of the Performance Security, without prejudice to the surviving provisions of this Contract, including the warranty provision as prescribed in Article 8.3 and the period of the option to purchase. (Emphasis supplied.)

The assertion of Smartmatic-TIM in its Consolidated Comment that COMELEC still retains the amount of Fifty Million Pesos of the performance security posted by Smartmatic-TIM, which was noted by Justice Peralta in his ponencia was not disputed. During the oral arguments, I inquired about the release of the Performance Security precisely because I believed it was crucial in determining when the AES Contract expired.

By virtue of the above-quoted stipulation and the COMELECs retention of the Performance Security, the AES Contract, of which the OTP is a part, was still a subsisting contract as of March 30, 2012, the date the OTP extension agreement was signed.

The next question is: Can the period to exercise OTP be validly amended after December 31, 2010? I believe so considering that stipulations of the AES Contract, including Article 19 which allowed amendments of said contract, were still effective as of March 30, 2012. Morever, there is nothing in the AES Contract, particularly in par. 2.2, Article 2, which prohibits the extension of the period of the OTP. The said extension is the nature of an amendment to the AES Contract, which can be done while the said Contract still has life. It would have been a different matter if the AES Contract had already expired before the period of the OTP was extended by agreement of the parties. In that case, contractual stipulations, including that on the amendment of the contract will cease to have any force and effect and any contract for the purchase of goods would be an entirely different contract which should comply anew with government procurement laws and regulations.

It should likewise be stressed that the contracting parties stipulated, under par. 2.2 of Article 2, that the effectivity of the OTP cannot be prejudiced by the expiration of the AES Contract. In other words, the said parties intended that effectivity of the OTP may even outlive, or survive beyond, the term of the AES Contract, assuming that such period to exercise the OTP was agreed upon during the existence of the AES Contract.

Under the facts obtaining in these cases, the original period of the OTP expired before the termination of the AES Contract. Considering that OTP is just an adjunct of the main AES Contract, which still exists, and there being no express or implied ground in the contract to bar such extension or revival of the period, the validity of the latter must be upheld.

Moreover, I agree with the observation of Justice Peralta that the amendment of the period is not a substantial amendment of the AES Contract that would prejudice the other bidders to the said contract.

Accordingly, for the above-stated reasons and the other grounds discussed by Justice Peralta in his ponencia, I reiterate my concurrence to the dismissal of the present petitions.

TERESITA J. LEONARDO-DE CASTRO

Associate Justice