Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 169914 – ASIA’S EMERGING DRAGON CORPORATION versus DEPARTMENT OF TRANSPORTATION AND COMMUNICATION, SECRETARY LEANDRO R. MENDOZA and MANILA INTERNATIONAL AIRPORT AUTHORITY.
G.R. No. 174166 – REPUBLIC OF THE PHILIPPINES, Represented by the DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS and MANILA INTERNATIONAL AIRPORT AUTHORITY versus COURT OF APPEALS (Eighth Division) and SALACNIB BATERINA.
DISSENTING OPINION
CORONA, J.:
Before the Court are consolidated cases involving the Ninoy Aquino International Airport International Passenger Terminal III (NAIA IPT III). G.R. No. 169914 is a special civil action for mandamus and prohibition under Rule 65 of the Rules of Court originally filed before us. G. R. No. 174166 is a petition for certiorari and prohibition also under Rule 65 seeking to nullify the August 24, 2006 resolution of the Court of Appeals (CA) in CA-G.R. SP No. 95539 and to enjoin the CA from proceeding with said case.1
On May 5, 2003, we rendered a decision in Agan, Jr. v. Philippine International Air Terminals Co., Inc.2 nullifying the 1997 Concession Agreement, the Amended and Restated Concession Agreement (ARCA) and its Supplements executed by the government (through the Department of Transportation and Communication [DOTC] and the Manila International Airport Authority [MIAA]) and the Philippine International Air
Terminals Co., Inc. (PIATCO) for the development of NAIA IPT III.
On December 19, 2005, we ruled in Republic v. Gingoyon3 that the national government could expropriate NAIA IPT III, with RA 89744 as the governing law.
In these consolidated petitions, NAIA IPT III is once again at the vortex of yet another storm. 2008 marks the fifteenth year after NAIA IPT III was first conceptualized and proposed as a BOT project. Up to now there appears to be no light at the end of the tunnel as this is the third decision of the Supreme Court on that project. How many more will there be before this project is finally opened?
Unfortunately, by its decision today in G.R. No. 169914, the majority may have not only unwittingly prolonged the opening and operation of NAIA IPT III. More significantly, it may have watered down the spirit of RA 6957, otherwise known as the Build-Operate-and-Transfer Law (BOT Law), as amended by RA 7718. In the process, it diluted the rights of an original proponent under Section 4-A of the said law. Thus, I respectfully dissent.
In G.R. No. 169914, petitioner Asia's Emerging Dragon Corporation (AEDC) seeks to: (1) compel respondents DOTC, Secretary Leandro R. Mendoza5 and MIAA or their agents and successors to execute and formalize with AEDC the draft concession agreement for the operation of NAIA IPT III and (2) direct them to cease and desist from awarding the operation of NAIA IPT III to third parties, or negotiating and entering into any concession agreement with third parties.6
In G.R. No. 174166, petitioner Republic of the Philippines, through the DOTC and MIAA, prays that the August 24, 2006 resolution of the CA be set aside7 and CA-G.R. SP No. 95539 be ordered dismissed.8 In the August 24, 2006 resolution, the CA issued a Temporary Restraining Order (TRO) enjoining the payment of the proffered value of NAIA IPT III.
The antecedent facts from Agan serve as a backdrop for both petitions:
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 [AEDC] which was registered with the Securities and Exchange Commission (SEC) on September 15, 1993.
On October 5, 1994, AEDC submitted an unsolicited proposal to the Government through the DOTC/MIAA for the development of [NAIA IPT III] under a build-operate-and-transfer arrangement pursuant to RA 6957 as amended by RA 7718 (BOT Law).
On December 2, 1994, the DOTC issued Dept. Order No. 94-832 constituting the Prequalification Bids and Awards Committee (PBAC) for the implementation of the NAIA IPT III project.
On March 27, 1995, then DOTC Secretary Jose Garcia endorsed the proposal of AEDC to the National Economic and Development Authority (NEDA). A revised proposal, however, was forwarded by the DOTC to NEDA on December 13, 1995. On January 5, 1996, the NEDA Investment Coordinating Council (NEDA ICC) — Technical Board favorably endorsed the project to the ICC — Cabinet Committee which approved the same, subject to certain conditions, on January 19, 1996. On February 13, 1996, the NEDA passed Board Resolution No. 2 which approved the NAIA IPT III Project.9
On February 26, 1996, respondent DOTC and AEDC signed a memorandum of understanding (MOU) stipulating the following:
1. The DOTC, on its own behalf and in representation of the [Government of the Philippines (GOP)], hereby represents that the [NAIA IPT III] 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.
2. The DOTC will undertake the [NAIA IPT III] Project under [RA 6957] as amended by [RA 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.
3. The DOTC hereby officially declares the necessity and urgency of the [NAIA IPT III] Project. Accordingly, the DOTC hereby manifests its desire for AEDC to have at least a partial soft opening of Terminal 3 by the first quarter of 1998, to substantially complete the works by mid 1998 and to commission and open the Terminal by the third quarter of 1998.
4. In pursuance of paragraph 3 hereof, AEDC shall adopt a fast track approach to project implementation and accordingly has engaged project advisors and consultants to prepare the preliminary designs and tender documents for the major works of the project.
5. Without prejudice to the outcome of negotiations on the terms and conditions of the BOT Contract that shall be executed, the parties commit themselves to the aforesaid schedule.
6. Consistent with the fast track approach and to anticipate and preempt delays resulting from financing and other problems, AEDC shall, and is hereby encouraged by the DOTC to, forthwith commence negotiations with its financial partners, investors and creditors to ensure that financial commitments are firmed up and financial resources are made available after the final approval of the project.
7. Due to the complexity and urgency of the project, the parties recognize the need for closer and timely coordination between the DOTC and AEDC. The parties hereto hereby agree to form forthwith a Joint Working Committee (JWC) composed of members from, and acceptable to, both parties to ensure complete and adequate coordination between them.
8. In conjunction with the "fast track" approach proposed by AEDC, the DOTC shall:
a. Commence and conclude, within the soonest possible time, negotiations with AEDC on the BOT contract;
b. Fast track the publication, invitation and evaluation of counter proposals for the Project; and
c. Coordinate with the Department of Public Works and Highways (DPWH), the Metro Manila Development Authority (MMDA), the concerned local government units and other government agencies to ensure proper interfacing of the [NAIA IPT III] design and road access requirements with the existing road and interchange improvement and traffic management projects particularly at the South Luzon Expressway (SLE) and EDSA; and
9 AEDC may be called upon to render assistance to DOTC in the activities enumerated to par. 8 hereof.
10. Nothing in the [MOU] 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.
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We continue with the narration of facts in Agan:
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 5:00 p.m. of September 20, 1996. The first envelope should contain the Prequalification Documents, the second envelope the Technical Proposal, and the third envelope the Financial Proposal of the proponent.
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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 September 23, 1996, the PBAC opened the first envelope containing the prequalification documents of the Paircargo Consortium. On the following day, September 24, 1996, the PBAC prequalified the Paircargo Consortium.
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On September 26, 1996, AEDC informed the PBAC in writing of its reservations as regards the Paircargo Consortium, which include:
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The PBAC gave its reply on October 2, 1996, informing AEDC that it had considered the issues raised by the latter, and that based on the documents submitted by Paircargo and the established prequalification criteria, the PBAC had found that the challenger, Paircargo, had prequalified to undertake the project. The Secretary of the DOTC approved the finding of the PBAC.
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 October 7, 1996, AEDC again manifested its objections and requested that it be furnished with excerpts of the PBAC meeting and the accompanying technical evaluation report where each of the issues they raised were addressed.
On October 16, 1996, the PBAC opened the third envelope submitted by AEDC and the Paircargo Consortium containing their respective financial proposals. Both proponents offered to build the [NAIA IPT III] for at least $350 million at no cost to the government and to pay the government: 5% share in gross revenues for the first five years of operation, 7.5% share in gross revenues for the next ten years of operation, and 10% share in gross revenues for the last ten years of operation, in accordance with the Bid Documents. However, in addition to the foregoing, AEDC offered to pay the government a total of 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 November 28, 1996 within which to match the said bid, otherwise, the project would be awarded to Paircargo.
As AEDC failed to match the proposal within the 30-day period, then DOTC Secretary Amado Lagdameo, on December 11, 1996, issued a notice to Paircargo Consortium regarding AEDC's failure to match the proposal.
On February 27, 1997, Paircargo Consortium incorporated into [PIATCO].
AEDC subsequently protested the alleged undue preference given to PIATCO and reiterated its objections as regards the prequalification of PIATCO.
On April 11, 1997, the DOTC submitted the concession agreement for the second-pass approval of the NEDA-ICC,
On April 16, 1997, AEDC filed with the Regional Trial Court of Pasig a Petition for Declaration of Nullity of the Proceedings, Mandamus and Injunction against the Secretary of the DOTC, the Chairman of the PBAC, the voting members of the PBAC and Pantaleon D. Alvarez, in his capacity as Chairman of the PBAC Technical Committee.
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On July 9, 1997, the DOTC issued the notice of award for the project to PIATCO.
On July 12, 1997, the Government, through then DOTC Secretary Arturo T. Enrile, and PIATCO, through its President, Henry T. Go, signed the "Concession Agreement for the Build-Operate-and-Transfer Arrangement of the [NAIA IPT III]" (1997 Concession Agreement).
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On November 26, 1998, the Government and PIATCO signed an Amended and Restated Concession Agreement (ARCA).
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Subsequently, the Government and PIATCO signed three Supplements to the ARCA. The First Supplement was signed on August 27, 1999; the Second Supplement on September 4, 2000; and the Third Supplement on June 22, 2001 (collectively, Supplements).
xxx xxx xxx 11
In the meantime, the petition for the declaration of nullity of proceedings, mandamus and injunction filed by AEDC against the Secretary of DOTC et al.12 in the Regional Trial Court (RTC) of Pasig City (Pasig court), Branch 261, docketed as Civil Case No. 6621313 was dismissed with prejudice in an order dated April 30, 199914 after the parties signed and filed a joint motion to dismiss on February 9, 1999.15
As already stated, we nullified in 2003 the contracts between the government and PIATCO for being contrary to public policy16 and for lack of the requisite financial capacity of the Paircargo Consortium (predecessor of PIATCO). We quote our conclusion in Agan:
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.17
Thereafter, on December 21, 2004, the government filed a complaint in the RTC,18 Pasay City, Branch 117 (the expropriation court), for the expropriation of the NAIA IPT III facilities. This case ultimately reached us by way of a petition for certiorari and prohibition in Gingoyon where we ruled that: (1) RA 8974 applied insofar as it required the immediate payment by the government to PIATCO of the proffered value (P3,002,125,000) of NAIA IPT III before the government could take possession of the facility; (2) the government was authorized to start the implementation of the NAIA IPT III airport terminal project by performing acts essential to its operation as an international airport terminal upon the effectivity of the writ of possession and (3) the government was to pay just compensation to PIATCO as fixed in the decision of the trial court immediately upon the finality of the said decision.19 As of today, therefore, the issue of expropriation has been settled in favor of the government. What remains to be settled by the Pasay City RTC is solely the issue of valuation of NAIA IPT III under RA 8974.
On March 10, 2005, former Congressman Salacnib Baterina,20 private respondent in G.R. No. 174166, sought to intervene in the expropriation proceedings in the RTC by filing a motion to intervene, motion to admit and a petition for prohibition in intervention.21 He asserted his legal interest by virtue of being a legislator, taxpayer, concerned citizen and the transcendental importance of the case.22 He sought to permanently enjoin the Republic from making or causing any payment of just compensation to PIATCO for NAIA IPT III arguing that the latter was not the owner of such structure.23
Meanwhile, in a letter to respondent DOTC dated March 14, 2005, AEDC offered to immediately operate the NAIA IPT III project.24 DOTC did not respond. In another letter dated September 1, 2005, AEDC demanded the immediate implementation of the February 26, 1996 MOU. Again, DOTC did not reply. It was only after AEDC wrote a third letter on September 8, 2005 that the government, through the Office of the Solicitor General, responded in a letter dated September 21, 2005 stating:
We have carefully searched Philippine law, in vain, for the basis of what you claim is AEDC's "vested and perfected legal right to operate NAIA IPT III." xxx
We have also searched carefully the [MOU]. We see nothing in its language to believe that there is any existing obligation on the part of Government to recognize in AEDC the right to operate the terminal.25
Thus, on October 20, 2005, AEDC filed G.R. No. 169914.
Meanwhile, in another venue of conflict (the Pasay City RTC expropriation court), the events leading to G.R. No. 174166 were unfolding.
In an order dated October 27, 2005, the expropriation court granted the petition (for intervention) of Baterina.26 The Republic's motion for reconsideration was denied in an omnibus order dated December 13, 2005.27
Gingoyon was promulgated on December 19, 2005 by this Court, prompting Baterina to file a motion for intervention with motion for reconsideration in intervention on January 6, 2006.28 This was denied in a resolution dated February 1, 2006.29 The decision in Gingoyon became final and executory on March 17, 2006.30
On March 22, 2006, Baterina filed in the expropriation court a motion to declare in default and/or motion for summary judgment and prayed therein that the court (1) declare PIATCO and the Republic in default insofar as the petition for prohibition in intervention was concerned and (2) render a partial summary judgment on the issues of [a] whether the State, through the Bases Conversion Development Authority (BCDA), was the owner of NAIA IPT III and [b] whether NAIA IPT III was a proper object of expropriation.31
On March 27, 2006, the expropriation court motu proprio issued an order directing MIAA to immediately release to PIATCO the proffered value of NAIA IPT III in the amount of P3,002,125,000.32 On the same date, the ceiling of the arrival lobby section of NAIA IPT III collapsed, creating a 100-square foot hole in the ceiling.33 This prompted the Republic to file an urgent motion to quash the writ of execution.34
On March 29, 2006, AEDC filed a motion for leave to admit attached answer-in-intervention.35
On June 15, 2006, the expropriation court denied the Republic's motion to quash the writ of execution.36 On June 21, 2006, the Republic manifested that it would comply with the order of payment.37
On August 3, 2006, Baterina filed a petition for certiorari and prohibition [with urgent prayer for the issuance of a temporary restraining order (TRO) and writ of preliminary injunction] in the CA,38 docketed as CA-G.R. SP No. 95539.39
In an order dated August 8, 2006, the expropriation court reconsidered its December 13, 2005 omnibus order and denied, among others, the motion for intervention and motion to admit of Baterina.40 It also disallowed the intervention of AEDC.41
In a resolution dated August 24, 2006, the CA (in CA-G.R. SP No. 95539) issued a TRO:
x x x directing [Judge Jesus B. Mupas], in his capacity as Acting Presiding Judge of the [RTC] of Pasay City, Branch 117, or whoever is, or may be acting in his place and stead, as well as the other public respondents herein named,42 to cease and desist from implementing the assailed Orders43 subject of this petition for certiorari and prohibition with urgent prayer for the issuance of a [TRO] and writ of preliminary injunction, or from otherwise causing payment and from further proceeding with the determination of just compensation in the expropriation case involved herein, until such time that petitioner's motion to declare in default and motion for partial summary judgment shall have been resolved by the [RTC]; or that it is clarified that PIATCO categorically disputes the proffered value of [NAIA IPT III].44 x x x x
On September 4, 2006, the Republic filed G.R. No 17416645 in this Court. However, on September 8, 2006, the CA lifted the TRO and set aside its August 24, 2006 resolution.46 On September 11, 2006, the Republic tendered to the expropriation court a check47 payable to PIATCO in the amount of P3,002,125,000 representing the proffered value of NAIA IPT III.48 This was received by PIATCO's duly authorized representative.49
In a resolution of this Court dated September 12, 2006, the cases docketed as G.R. Nos. 169914 and 174166 were consolidated. Oral arguments were held on November 14, 2006.
In a manifestation dated July 12, 2007, Baterina informed the Court that the CA promulgated its decision on December 27, 2006 in CA-G.R. SP No. 95539.50 The CA denied due course and dismissed the action on the ground that Baterina was barred by the doctrine of "law of the case" from questioning the legality of the expropriation. On January 18, 2007, Baterina filed a motion to suspend proceedings with ad cautelam motion for reconsideration of the decision. This was denied in a resolution dated May 21, 2007.51
Baterina thus filed a motion for time to file petition for review on certiorari with this Court praying for an extension of thirty days within which to file a petition from the CA's December 27, 2006 decision and May 21, 2007 resolution. This was docketed as G.R. No. 178022. However, since the issues that he wanted to raise in this petition were the same as those already raised in G.R. No. 174166, he manifested that he would no longer pursue G.R. No. 178022. Consequently, the latter action was terminated.
The Issues In G.R. No. 169914
The issues raised by AEDC in G.R. No. 169914 are:
1. whether AEDC, as the recognized and unchallenged original proponent, has the exclusive, clear and vested statutory right to the award of the NAIA IPT III project;
2. whether respondents DOTC et al. have the statutory duty to award the NAIAI IPT III project to AEDC as the unchallenged original proponent, after the nullification of the award to PIATCO and
3. whether respondents DOTC et al. have the legal basis or authority to take over the NAIA IPT III project, to the exclusion of AEDC, or to award the project to third parties.52
The Issues In G.R. No. 174166
On the other hand, the Republic raises the following issues in G.R. No. 174166:
1. whether respondent Baterina has legal standing to sue and
2. whether CA-G.R. SP No. 95539 has become moot and academic.
The issues that Baterina wants us to decide may be distilled into two:
1. whether NAIA IPT III is owned by BCDA and is a proper object of expropriation and
2. whether PIATCO is entitled to just compensation under RA 8974 or based on quantum meruit or not at all.
For purposes of clarity, the issues in G.R. Nos. 169914 and 174166 will be tackled separately.
(A) G.R. No. 169914
During the oral arguments, there were discussions regarding the possibility that the claim of AEDC may already be barred by res judicata since it previously filed Civil Case No. 66213 in the Pasig Regional Trial Court in 1997. This case was dismissed with prejudice upon a joint motion to dismiss filed by the parties and granted by the court in 1999.
Respondents DOTC et al. hardly exerted any effort to argue and emphasize this point. They merely stated that "the alleged clarity of AEDC's claimed legal right had been diluted by its own [joint motion] to dismiss a previous petition for Mandamus against the Republic, with prejudice."53 Instead, DOTC et al. chose to meet the substantive issues raised in AEDC's petition head on.
The parties in their joint motion specifically stated that they were "jointly mov[ing] for the dismissal [of the case] without any of the parties admitting liability or conceding to the position taken by the other in the instant case."54 However, the Pasig court still dismissed the case with prejudice. For this reason, the majority ruled that AEDC's petition is already barred by res judicata.
I disagree.
A case is barred by prior judgment or res judicata when the following elements are present: (1) there must be a final judgment or order; (2) it is rendered by a court having jurisdiction over the subject matter and the parties; (3) it is a judgment or an order on the merits and (4) there must be, between the first and the second actions, identity of parties, of subject matter and of causes of action.55
The presence of the first two elements is not controversial. Regarding the third element, the order of dismissal based on amicable settlement is considered as one on the merits:
A compromise agreement once approved by final order of the court has the force of res judicata between the parties and should not be disturbed except for vices of consent or forgery. Hence, a decision on a compromise agreement is final and executory; it has the force of law and is conclusive between the parties.56
The agreement was considered as the decision on the case.57 Moreover, the order was specified to be with prejudice. A dismissal with prejudice is an adjudication on the merits which finally disposes of the controversy and it constitutes a bar to a future action unless it is reversed.58
The fourth element is likewise present. There is identity of subject matter which is the NAIA IPT III. There is also an identity of parties between the instant case and the previous action by AEDC even if the PBAC chairman and members were impleaded in the previous action but not here:
Well settled is the rule that only substantial, and not absolute, identity of parties is required for res judicata to lie. There is substantial identity of parties when there is a community of interest between a party in the first case and a party in the second case albeit the latter was not impleaded in the first case.59
There is a community of interest since all the respondents in both actions were involved in the approval and implementation of the NAIA IPT project under the BOT Law.
However, the final element is doubtful, to say the least. There is no identity of causes of action. In the case dismissed by the Pasig court, AEDC principally sought to prevent the award of NAIA IPT III project to PIATCO which it argued to be unqualified to submit a bid (a fact later confirmed by Agan in 2003 when the PIATCO contracts were nullified.) In the present case, however, AEDC, on the strength of its argument that it is entitled to the award of the project as an unchallenged original proponent of an unsolicited proposal, prays that it be awarded the project.
The Court should have therefore declined to dismiss this case on doubtful technicality. Given the huge significance and peculiar circumstances of this case, not to mention the great impact of this project on the national economy and the country's reputation in the international community, we can justifiably relax the application of the rule on res judicata. As we emphasized in Salud v. Court of Appeals:60
In our age, where courts are harassed by crowded dockets and complaints against slow foot justice, frequent technical reliance on the preclusive breadth of res judicata is understandable. The importance of judicial economy and avoidance of repetitive suits are strong norms in a society in need of swift justice. Be that as it may, there should not be a mechanical and uncaring reliance on res judicata where more important societal values deserve protection.61
Procedural rules are mere tools to aid the courts in the speedy, just and inexpensive resolution of pending cases.62 Substantial justice remains the primordial and all-important objective and, to this end, the liberal construction of the rules may be permitted. Jurisprudence holds that, as much as possible, cases should be decided on their merits and not on technicalities.63 Indeed, the principle of res judicata can rightfully be set aside in favor of substantial justice.64
We now proceed to resolve the substantive issues.
Legal right of AEDC
as Original Proponent
The proposal submitted by AEDC for the NAIA IPT III project was an unsolicited proposal governed by Section 4-A of RA 6957, as amended by RA 7718:65
Sec. 4.-A. Unsolicited Proposals. — Unsolicited proposals for projects may be accepted by any government agency or local government unit [or LGU] on a negotiated basis: Provided, That, all the following conditions are met: (1) such projects involve a new concept in 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 that price within thirty (30) working days.
The pertinent implementing rules and regulations (IRR) on unsolicited proposals state:
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 project 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 immediately be awarded the project.
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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 ICC or Local Sanggunian.
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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 [TOR] 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 [TOR] 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.
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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 in the [TOR] for the challengers. (Emphasis supplied)
AEDC argues that once an unsolicited proposal is accepted by the government and the proponent assumes the status of a recognized original proponent, the government becomes committed to pursue the project with it (the original proponent) unless a better competitive or comparative proposal is offered by a challenger in a process known as the "swiss challenge" and the original proponent is unable to match such better offer.66 It asserts that necessarily, if the swiss challenge process fails to produce a better price offer, as in this case, the vested right to the award of the project to the recognized original proponent is deemed perfected and it "shall immediately be awarded the project" by the government, consistent with the clear intent and logical implication of Section 10.1(c) of the IRR.67
According to AEDC, the swiss challenge failed to produce a better offer from a qualified challenger because PIATCO was found to be ineligible and disqualified by this Court and the award to PIATCO and all agreements it entered into with respondents DOTC et al. were declared null and void.68
AEDC claims that this evidences its "exclusive, clear and vested statutory right" to the formal award of the NAIA IPT III project and the formalization and execution of the draft concession agreement for the operation of the project. And respondents DOTC et al. are duty bound to recognize and give effect and protection to such right.69
Respondents DOTC et al., on the other hand, counter:
A plain reading of these provisions reveals that the BOT Law accords the "original proponent" the following rights:
1. The right to match the lower price proposal within thirty (30) days;
2. The right to the award of the project if the original proponent is able to match the lower price proposal.
These are the only clear rights recognized in favor of the original proponent in the context of a claim to the automatic award of the [NAIA IPT III] Project, as [AEDC] prays in the instant petition. Nothing in the BOT Law or its implementing rules says, expressly or impliedly, that the original proponent is automatically entitled to the award of the BOT Project in case the award to the challenger is subsequently nullified, or if the challenger is later declared to be unqualified, as what transpired in the instant case. xxx70
Intent of Section 4-A of the BOT Law Is to Protect Original Proponent
As we noted in Agan, the lack of infrastructure funds has forced the government to resort to the BOT Law which allows and even encourages the private sector to participate in projects needed by the public.71 Indeed, the declared policy of the law states:
It is the declared policy of the State to recognize the indispensable role of the private sector as the main engine for national growth and development and provide the most appropriate incentives to mobilize private resources for the purpose of financing the construction, operation and maintenance of infrastructure and development projects normally financed and undertaken by the Government. Such incentives, aside from financial incentives as provided by law, shall include providing a climate of minimum government regulations and procedures and specific government undertakings in support of the private sector.72
This is consistent with the state policy enshrined in the Constitution that "[t]he State recognizes the indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investments."73
RA 7718 was later enacted introducing several amendments to the original BOT Law (RA 6957). One such amendment was the inclusion of unsolicited proposals (Section 4-A). In her sponsorship speech,74 then Senator Gloria Macapagal-Arroyo75 explained the concept behind unsolicited proposals and the objective of the amendment:
Unsolicited proposals refer to proposals of the private sector for projects not included in the medium-term infrastructure program of the agencies. In the proposed amendments, new and/or unsolicited proposals for national projects eligible for implementation, which are not included in the list of projects eligible for financing under the law and which do not involve government financing or direct guarantee, may still be pursued and implemented by the agencies concerned provided a copy of each proposal and the eventual contract is submitted to the NEDA Board for their information, within 30 days from receipt and/or signing thereof.
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.76 (Emphasis supplied)
Under Section 4-A, after the original proponent submits its unsolicited proposal, other proponents may make lower price offers (referred to as the "swiss challenge"). The original proponent has the right to match any lower bid submitted – a form of protection and advantage conferred on the original proponent which has 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."77 Because of its valuable role in initiating an infrastructure project the government would otherwise be unable to put up or design out of its own resources, the original proponent is granted the option to match the lower price proposal of any challenger.
The law recognizes the initiative and civic-mindedness, as well as the innovative concept proposal (and the costs voluntarily assumed to come up with it), of the original proponent. It accords him a preferred status and vests on him the right to pursue his approved proposal and implement the project. His status and right are tested in the crucible of a swiss challenge and may be defeated only if and when he fails to match the bid of a qualified winning bidder.
Thus, the original proponent is entitled to the award of the BOT project in the following cases:
1. no competitive bid was submitted;
2. there was a lower bid title by a qualified bidder but the original proponent matched it and
3. there was a lower bid but it was made by a person/entity not qualified to bid, in which case it is as if no competitive bid was made.
The congressional deliberations show that the legislative intent was to give protection to the original proponent. The following statements of former Senators Neptali Gonzales and Sergio Osmeña III during the second reading of Senate Bill No. 1586 (precursor of RA 7718) were clearly reflective of this intent:
Senator Gonzales:
xxx xxx xxx
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:
xxx xxx xxx
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. xxxx78 (Emphasis supplied)
As an original proponent, AEDC should rightfully be accorded this protection.79
The majority recognizes that an original proponent of an unsolicited proposal has rights and privileges because the law intended "to encourage private sector initiative in conceptualizing infrastructure projects that would benefit the public."80 However, the majority limits the rights of an original proponent to the following: (1) the right to match the lowest or most advantageous proposal and (2) the right to be awarded the project in the event that the original proponent is able to match the lowest or most advantageous proposal submitted. Moreover, for the majority, these rights arise only when there are other proposals submitted during the public bidding of the infrastructure project.
The majority's reading of the law considerably waters down the rights accorded to an original proponent. In failing to consider a situation where either no competitive bid was submitted or a lower bid was submitted by an entity not qualified to bid, the rights of the original proponent are unduly subjected to the condition of the presence of competitive bids. To reiterate, the spirit of the provision is "to protect project proponents which have already incurred costs in the conceptual design and in the preparation of the proposal." Certainly, regardless of the presence of competitive bids, the original proponent incurs costs. As such, it deserves the protection which the law seeks to afford it. The law which seeks to encourage private sector participation should be interpreted in a way that would recognize, not emasculate, rights of private investors.
The Swiss Challenge Did
Not Produce a Lower Bid
Under Section 10.6 of the IRR of the BOT Law, as amended by RA 7718, after the proposal is accepted by the agency involved (in this case respondent DOTC), the latter becomes committed to pursue the project and can no longer entertain other similar proposals until the solicitation of comparative proposals. In fact, AEDC, as original proponent, and respondent DOTC already executed an MOU wherein they agreed to fast track the project.81 In the MOU, AEDC was also encouraged by the DOTC to commence negotiations with its financial partners and to ensure that financial commitments and resources were firmed up and made available after the final approval of the project.82 This was because, at this point, the only thing left to be hurdled (before the project was awarded to AEDC) was the resolution of the swiss challenge.
However, PIATCO, the lone bidder in the swiss challenge, turned out to be unqualified. We said so in no uncertain terms in Agan. The subsequent award of the project to it and the contracts it entered into with the government were all nullified and voided.83 Since there was no qualified bidder during the swiss challenge, it followed that no other proposal(s) could have been considered by respondents and the original proponent remained unchallenged.
This of course meant only one thing: there was no qualified challenger to AEDC's proposal and consequently, there was no better offer to match. The legal effect of PIATCO's disqualification was simply that no other proposal could be deemed to have been received during the designated period and AEDC, having complied with all the requirements and conditions under Section 4-A of the law, had the right to be awarded the project.
Mandamus Is Proper
Under Rule 65, Section 384 of the Rules of Court, a petition for mandamus may be filed 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. Mandamus is an extraordinary writ to compel the performance, when refused, of a ministerial duty that is already imposed on respondent and there is no other plain, speedy and adequate remedy in the ordinary course of law. Petitioner should have a well-defined, clear and certain legal right to the performance of the act and it must be the clear and imperative duty of respondent to do the act required to be done.85
Mandamus will not issue to enforce a right, or to compel compliance with a duty, which is questionable or over which a substantial doubt exists. The principal function of the writ of mandamus is to command and to expedite, not to inquire and to adjudicate; thus, it is neither the office nor the aim of the writ to secure a legal right but to implement that which is already established. Unless the right to the relief sought is unclouded, mandamus will not issue.86
Mandamus applies as a remedy where petitioner's right is founded clearly in law.87 AEDC's right to the award of the NAIA IPT III project was clear under Section 4-A of the BOT Law (in the light of Agan) given the fact that no better offer legally existed or could be taken into account. It acquired this vested right from the time PIATCO was disqualified to bid during the swiss challenge.
Respondents argue, and the majority agreed, that there are only two clear legal rights recognized in favor of the original proponent under Section 4-A of the BOT Law and Section 10.1 of its IRR: (1) the right to match the lower price proposal within 30 days and (2) the right to the award of the project if the original proponent is able to match the lower price proposal.
I disagree. This view fails to consider a situation wherein there is no other qualified bidder like in the case of AEDC. Legally, the situation is as if no competitive bid was ever submitted. We have stated that for mandamus to issue, it is not necessary that the right and/or duty are absolutely expressed; they must, however, be clear.88 Here, it is obvious that the original proponent is entitled to the award in the event that there is no other qualified bidder during the swiss challenge. The law need not expressly state the obvious.
The parties do not dispute that the government already accepted the unsolicited proposal of AEDC, subject only to the swiss challenge. Section 10.1, par. (c) of the IRR states that "if the original project proponent matches the submitted lowest price within the specified period, [it] shall immediately be awarded the project." As a matter of fact, there was no need for AEDC to match any lower bid for the simple reason that there was no qualified bidder during the swiss challenge. It therefore became the ministerial duty of respondents to award the NAIA IPT III project to it.
Respondents DOTC et al. contend that the BOT implementing rules have provisions on "recommendation to award"89 and "decision to award"90 thereby belying any duty on their part to automatically award the project to AEDC.91 I disagree with this interpretation of the BOT Law. It is outrageous to even suggest that a proponent's fate can be made to hang in the balance even after the conclusion of the swiss challenge process. At this point, it has either matched the lower price proposal or there never was any other proposal or challenger. Yet DOTC et al. insist that the right can still be effectively negated at the discretion of the approving authorities. This is oppressive to the proponent and one good way to drive away investors from our shores, what with the uncertainty of the process and status of their rights.
AEDC having satisfied all the requisites therefor, the writ of mandamus shall issue. Respondents should award the NAIA IPT III project to AEDC and formalize the NEDA-approved draft concession agreement offered for public bidding during the swiss challenge and turn over possession of the facilities to AEDC.92
In finalizing the draft concession agreement, care should be taken that the parties do not repeat the mistake of introducing "material and substantial amendments" which resulted in the nullification of the PIATCO contracts. It is important to note that in its representations to this Court, AEDC obligated itself to:
1. construct an underground passenger access tunnel connecting terminals I, II and III;93
2. complete the construction of NAIA IPT III;94
3. finance the additional investments necessary to put NAIA IPT III in operation;95
4. reimburse the government the initial payment of P3,002,125,000 it made to PIATCO96 and
5. pay the obligations owing to the general contractors.97
Needless to say, the government is likewise entitled to the fees and income it should receive from AEDC under the BOT Law.
The NAIA IPT III Project
Remains a BOT Project
In view of AEDC's rights as original proponent, the NAIA IPT III project cannot be arbitrarily removed from the coverage of the BOT Law to its prejudice. AEDC, through no fault of its own, obviously can no longer fulfill its obligation under the law to build the terminal since the construction of NAIA IPT III is now substantially complete. But it can pay whatever amount is still due, specifically the fair value of the facility, pursuant to our ruling in Gingoyon.98
The majority ruled that the BOT Law is neither applicable nor practicable in view of the fact that the NAIA IPT III is substantially complete. However, the fact that the terminal is substantially built should not be a serious hindrance to the recognition of AEDC's rights under the BOT Law. While AEDC no longer has to build the facility as one already exists, it will have to assume the payment due to the builder thereof, PIATCO, and to complete the facility to make it fully functional. It would essentially undertake the burden of building it. Why should AEDC be penalized for having been unduly prevented from building it?
Furthermore, building the facility is simply one stage of AEDC's proposal and of the project. As a BOT project, the proposal also pertained to the operation of the facility (which is also covered by the protection of Section 4-A).99 While AEDC can no longer build the facility without any fault on its part, it can and should operate said facility.
Thus, after the concession agreement is finalized, AEDC may lawfully proceed with the operation of NAIA IPT III. Our ruling in Gingoyon:
xxx xxx xxx
(4) Applying [RA 8974], the Government is authorized to start the implementation of the [NAIA IPT III] project by performing the acts that are essential to the operation of the [NAIA IPT III] 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."100
must be taken in the context of the legal right of AEDC to the award of the project. This necessarily includes the turn-over of possession and the operation of NAIA IPT III.
Accordingly, it follows that prohibition101 also lies to prevent respondents' threatened acts to bid out or award to third parties the operation of NAIA IPT III. Otherwise, the rights of AEDC would be rendered inutile.
(B) G.R. No. 174166
We will first settle the procedural issues involved here.
Private respondent
has Legal Standing
Petitioner Republic argues that private respondent Baterina has no legal standing to sue.102 According to the Republic, this Court in Gingoyon already rejected Baterina's legal standing:
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.
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. x x x x 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 [MIAA], 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.103
It also contends Baterina lost his standing as intervenor in the expropriation case pending before the RTC when the latter denied his motion for intervention on August 8, 2006.104
Baterina counters that the Court in Gingoyon did not actually rule that he had no legal standing to intervene.105 It simply denied the motion because it was filed only after the rendition of the decision.106 Moreover, the Court merely "noted" that the proffered value was derived from money deposited by MIAA and did not make any conclusion, whether of law or fact.107 In addition, the December 13, 2005 order which recognized his standing to intervene was already final, thus Acting Presiding Judge Mupas of the expropriation court committed grave abuse of discretion when he reconsidered this ruling in his August 8, 2006 order.108
Legal standing or locus standi is a party's personal and substantial interest in a case such that he has sustained or will sustain direct injury as a result of the governmental act being challenged.109 It calls for more than just a generalized grievance.110 The term "interest" means a material interest, an interest in the issue affected by the govermental act, as distinguished from mere interest in the question involved or a mere incidental interest.111 Here, Baterina invoked that his being a legislator, taxpayer, concerned citizen, and the transcendental importance of the issues involved, imbued him with standing to intervene in the expropriation case.112
We need not go into an extensive discussion of this point. Being a mere procedural technicality, the requirement of legal standing may be waived or relaxed by the Court in the exercise of its discretion. Hence, in Agan, we ruled that:
Standing is a peculiar concept in constitutional law because in some cases, suits are not brought by parties who have been personally injured by the operation of a law or any other government act but by concerned citizens, taxpayers or voters who actually sue in the public interest. Although we are not unmindful of the cases of Imus Electric Co. v. Municipality of Imus and Gonzales v. Raquiza wherein this Court held that appropriation must be made only on amounts immediately demandable, public interest demands that we take a more liberal view in determining whether the petitioners suing as legislators, taxpayers and citizens have locus standi to file the instant petition. In Kilosbayan, Inc. v. Guingona, this Court held "[i]n line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and even association of planters, and non-profit civic organizations were allowed to initiate and prosecute actions before this Court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders of various government agencies or instrumentalities," Further, "insofar as taxpayers' suits are concerned . . . (this Court) is not devoid of discretion as to whether or not it should be entertained." As such ". . . even if, strictly speaking, they [the petitioners] are not covered by the definition, it is still within the wide discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious constitutional questions raised." In view of the serious legal questions involved and their impact on public interest, we resolve to grant standing to the petitioners.113 (Emphasis supplied)
The issues raised in these petitions involving an airport terminal costing more than P3 billion have a great impact on public interest. Given the transcendental importance of the case, we grant standing to Baterina.
Technicalities May Be Set Aside Where The
Issues are of Transcendental Importance
The remaining relief being pursued by the Republic in G.R. No. 174166 is the issuance of a writ of injunction permanently enjoining the CA from proceeding with and resolving CA-G.R. SP No. 95539, the petition filed by Baterina.114
In CA-G.R. SP No. 95539, Baterina basically wanted to stop the payment to PIATCO of the P3,002,125,000 proffered value of NAIA IPT III115 and for the expropriation court to first resolve the issue of the ownership of NAIA IPT III and its propriety as an object of expropriation.
Considering that payment (a supervening event) has already been released to and received by PIATCO and the fact that CA-G.R. SP No. 95539 was already dismissed by the CA, the Republic's petition may well be considered moot and academic. However, both the Republic and Baterina have signified their desire to submit for resolution of this Court the substantive issues raised by Baterina in the expropriation court.116 As we already stated and discussed, this case involves matters of transcendental importance which should not be evaded. It is imperative that all pertinent unanswered questions which remain obstacles to the operationalization of NAIA IPT III be resolved immediately and completely. We may settle these substantive issues here and now, considering that these are questions of law cognizable by this Court.
Furthermore, the Court can relax or even suspend its procedural rules in the exercise of its inherent power under the Constitution "to promulgate rules concerning … pleading, practice and procedure in all courts."117 Besides, this Court is the final arbiter of all legal questions or controversies.
Thus, the Court may dispense with the normal procedure of remanding the case to the expropriation court in order to avoid further delays in the resolution of the case.118 It can consider the substantive issues raised by Baterina as properly brought before this Court and rule on them accordingly.
Now, the substantive issues.
Republic May Properly Resort To
Expropriation of NAIA IPT III
The power of eminent domain is the inherent right of the State to condemn private property for public use upon payment of just compensation.119 Thus, for expropriation to be valid, the following requirements must be met: (1) the taking must be for public use and (2) just compensation must be paid to the owner of the private property.120
At the very heart of Baterina's intervention in the expropriation case is his argument that the Republic could not rightfully expropriate NAIA IPT III because the government already owned it. Stated differently, PIATCO, as builder of the structure under a BOT arrangement, never owned NAIA IPT III. It was the Republic, from the onset, which owned it because:
1. Sec. 2 (b) of the BOT Law121 does not contemplate that ownership over the built structure is vested upon the project proponent;
2. If the legislature intended that the project proponent would have ownership of the structure, then the BOT Law would have simply said so;
3. The statement in Tatad v. Garcia, Jr.122 regarding the ownership of structures built under a BOT arrangement is obiter dictum; and
4. NAIA IPT III was built on land owned by the BCDA thus it belongs to the owner of the land under the Civil Code.123
I disagree. The builder in a BOT arrangement is the owner of the facilities it builds.
In Tatad v. Garcia, we ruled that a foreign corporation which constructed the facilities of EDSA Light Rail Transit III under a Build-Lease-Transfer scheme was the owner of such facilities:
What private respondent owns are the rail tracks, rolling stocks like the coaches, rail stations, terminals and the power plant, not a public utility. xxx What constitutes a public utility is not their ownership but their use to serve the public.
The Constitution, in no uncertain terms, requires a franchise for the operation of a public utility. However, it does not require a franchise before one can own the facilities needed to operate a public utility so long as it does not operate them to serve the public.
xxx xxx xxx
In law, there is a clear distinction between the "operation" of a public utility and the ownership of the facilities and equipment used to serve the public.
Ownership is defined as a relation in law by virtue of which a thing pertaining to one person is completely subjected to his will in everything not prohibited by law or the concurrence with the rights of another.
xxx xxx xxx
The right to operate a public utility may exist independently and separately from the ownership of the facilities thereof. One can own said facilities without operating them as a public utility, or conversely, one may operate a public utility without owning the facilities used to serve the public. xxxx
xxx xxx xxx
The BOT scheme is expressly defined as one where the contractor undertakes the construction and financing of an infrastructure facility, and operates and maintains the same. The contractor operates the facility for a fixed period during which it may recover its expenses and investment in the project plus a reasonable rate of return thereon. After the expiration of the agreed term, the contractor transfers the ownership and operation of the project to the government.124 (Emphasis supplied)
There is no reason why this ruling should not apply here.
We already stated in Gingoyon that:
x x x In Tatad v. Garcia, the Court acknowledged that the operator of the EDSA Light Rail Transit project under a BOT scheme was the owner of the facilities such as "the rail tracks, rolling stocks like the coaches, rail stations, terminals and the power plant."
There can be no doubt that PIATCO has ownership rights over the facilities which it had financed and constructed. The 2004 [Agan] Resolution squarely recognized that right when it mandated the payment of just compensation to PIATCO prior to the takeover by the Government of [NAIA IPT III]. 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.
Since the rights of PIATCO over the NAIA 3 facilities are established, the nature of these facilities should now be determined. x x x125 (Emphasis supplied)
To construe the BOT law the other way would be highly prejudicial to the proponent/builder of the project. The proponent/builder who spends a tremendous amount of money on the facilities has ownership rights126 over what it builds. Its rights are of course limited by the provisions of the BOT law and other relevant laws.
The correctness or propriety of the expropriation of NAIA IPT III was assumed in Gingoyon. It was not even an issue there because the question squarely confronted was which law (Rule 67 of the Rules of Court or RA 8974) should govern the valuation of the subject matter of the expropriation proceedings. To resolve this, the Court, precisely, had to first accept the propriety of the expropriation:
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 IPT III] 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 [Agan] Resolution, in requiring the payment of just compensation prior to the takeover by the Government of [NAIA IPT III], effectively precluded it from acquiring possession or ownership of the [NAIA IPT III] 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 [Agan] Resolution, the right of the Government to take over the [NAIA IPT III] terminal was preconditioned by lawful order on the payment of just compensation to PIATCO as builder of the structures.
The determination of just compensation could very well be agreed upon by the parties without judicial intervention, and it appears that steps towards that direction had been engaged in. Still, ultimately, the Government resorted to its inherent power of eminent domain through expropriation proceedings. Is eminent domain appropriate in the first place, with due regard not only to the law on expropriation but also to the Court's 2004 Resolution in Agan?
The right of eminent domain extends to personal and real property, and the [NAIA IPT III] 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 IPT III] complex "stands on a parcel of land owned by the Bases Conversion Development Authority, another agency of [the Republic of the Philippines]."
Admittedly, eminent domain is not the sole judicial recourse by which the Government may have acquired the [NAIA IPT III] facilities while satisfying the requisites in the 2004 [Agan] 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.127 (Emphasis supplied)
In recognizing the right of AEDC to the award of the NAIA IPT III project, would the public purpose of the expropriation be defeated by the government's taking over a privately owned structure, only to turn over its operation to another private entity (AEDC)? The answer is no.
To be valid, the taking must be for public use. The meaning of the term "public use" has evolved over time in response to changing public needs and exigencies. Public use which was traditionally understood as strictly limited to actual "use by the public" has already been abandoned.128 "Public use" has `now been held to be synonymous with "public interest," "public benefit," "public welfare" and "public convenience."129 It includes the broader notion of indirect public benefit or advantage.130 Whatever may be beneficially employed for the general welfare satisfies the requirement of public use.131
In the 2006 case of Didipio Earth-Savers' Multi-Purpose Association, Incorporated (DESAMA) v. Gozun,132 we considered the taking of land by the State to enable holders of Financial and Technical Assistant Agreements to pursue their mining operations as taking for a public use since "mining is an industry which is of public benefit."133 We said: "That public use is negated by the fact that the State would be taking private properties for the benefit of private mining firms or mining contractors is not at all true."134
We took our cue from earlier cases wherein we considered the expanded and modern meaning of "public use:"
1. In Heirs of Juancho Ardona v. Reyes,135 we held that promotion of tourism is within the meaning of "public use"—
The petitioners' contention that the promotion of tourism is not "public use" because private concessionaires would be allowed to maintain various facilities such as restaurants, hotels, stores, etc. inside the tourist complex is impressed with even less merit. Private bus firms, taxicab fleets, roadside restaurants, and other private businesses using public streets and highways do not diminish in the least bit the public character of expropriations for roads and streets. The lease of store spaces in underpasses of streets built on expropriated land does not make the taking for a private purpose. Airports and piers catering exclusively to private airlines and shipping companies are still for public use. The expropriation of private land for slum clearance and urban development is for a public purpose even if the developed area is later sold to private homeowners, commercial firms, entertainment and service companies, and other private concerns.136 (Emphasis supplied)
2. In Estate of Salud Jimenez v. Philippine Export Processing Zone,137 we ruled that the establishment of an export processing zone is a legitimate public purpose notwithstanding that portion of the land was leased to private commercial banks:
… The expropriation of Lot 1406-B for the purpose of being leased to [commercial] banks and for the construction of a [transportation] terminal has the purpose of making banking and transportation facilities easily accessible to the persons working at the industries located in [the Philippine Export Processing Zone].138
3. In Reyes v. National Housing Authority,139 we stated that the low cost housing project on the expropriated lots is compliant with the "public use" requirement:
The act of respondent [National Housing Authority] in entering into a contract with a real estate developer for the construction of low cost housing on the expropriated lots to be sold to qualified low income beneficiaries cannot be taken to mean as a deviation from the stated public purpose of their taking.140 (Emphasis supplied)
Clearly, the State, through expropriation proceedings, may take private property even if, admittedly, it will transfer this property again to another private party as long as there is a public purpose to the taking. In 2005, the United States Supreme Court held in Kelo v. New London141 that promotion of economic development qualifies as a public use even if private parties are benefited:
Quite simply, the government's pursuit of a public purpose will often benefit individual private parties. For example, in Midkiff, the forced transfer of property conferred a direct and significant benefit on those lessees who were previously unable to purchase their homes. In Monsanto, we recognized that the "most direct beneficiaries" of the data-sharing provisions were the subsequent pesticide applicants, but benefiting them in this way was necessary to promoting competition in the pesticide market. The owner of the department store in Berman objected to "taking from one businessman for the benefit of another businessman," referring to the fact that under the redevelopment plan land would be leased or sold to private developers for redevelopment. Our rejection of that contention has particular relevance to the instant case: "The public end may be as well or better served through an agency of private enterprise than through a department of government–or so the Congress might conclude. We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects."142
Expropriation may have been viewed as illogical143 or problematic but there was no doubt that the government had the power and right to institute such proceedings as long as the requisites for its valid exercise were present, as they are here. Consequently, the P3,002,125,000 paid by the Republic to PIATCO as proffered value of the expropriated structure was held to be valid. AEDC will reimburse this amount to the Republic in consonance with our ruling that it (AEDC) shall assume the payment of just compensation due to PIATCO.
DETERMINATION OF
JUST COMPENSATION IS A
JUDICIAL FUNCTION
Baterina argues that if expropriation is permitted, PIATCO will be entitled to just compensation based on the
replacement cost of the structures which will include contractor's profit and overhead costs.144 He asserts that PIATCO is, at best, only entitled to recover its costs on the basis of quantum meruit and, at worst, is not at all entitled to compensation since it is guilty of fraud and bad faith.145
The Republic counters that nothing in RA 8974 precludes the expropriation court from considering evidence of illegality or wrongdoing on the part of PIATCO in the determination of just compensation.146
I agree with the Republic.
In Agan, we stated:
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 [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.147 (Emphasis supplied)
In determining the proper amount to be paid under RA 8974, we held in Gingoyon that:
Under [RA 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 [RA 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 [RA 8974], but to principles of equity as well.148 (Emphasis supplied)
As we stated in Agan (which we likewise recognized in Gingoyon), compensation must conform not only with law but equity as well. This means that the expropriation court is not confined to strictly following the formula spelled out in the law and instead is given latitude in its determination of the compensation due to PIATCO.149 After all, the determination of just compensation is a judicial function.
Equity is defined as justice outside law, being ethical rather than jural and belonging to the sphere of morals than of law.150 It is grounded on the precepts of conscience and not on any sanction of positive law.151 Hence, equity finds no room for application where there is law.152 It cannot prevail over an express provision of the law. However, it is
… a complement of legal jurisdiction [that] seeks to reach and to complete justice where courts of law, through the inflexibility of their rules and want of power to adapt their judgments to the special circumstances of cases, are incompetent to do so. x x x153
Equity is a principle which takes into consideration the particular and special circumstances of the case so as to prevent inflicting unintended injustice on a party. Its application should not deprive any party of an existing right, but should render complete justice to one with a meritorious cause.
The determination of the final amount of fair and just compensation154 due PIATCO remains the task of the expropriation court.
Equity seeks to render complete justice by correcting deficiencies or flaws in the law. It affords the expropriation court flexibility to take into consideration factors which it could not have considered if it applied RA 8974 alone. Needless to state, the just compensation owing to PIATCO for the construction of NAIA IPT III should not include any amounts that are bloated or unreasonable and those that involve illegality, bribery, corruption, collusion, fraud and contravention of public policy. Defects in the terminal and the amounts needed to correct them, specially those affecting public safety, must also be excluded. Therefore, Baterina's misgivings that PIATCO will be unjustly rewarded for its supposed wrongdoings have no basis and are merely speculative.
In line with this, Baterina's prayer that the Solicitor General be directed to disclose evidence its office has gathered on PIATCO's alleged bad faith, corruption and fraud should be denied for being premature. The government must be given the chance to present its evidence as it deems fit. In this connection, since AEDC will ultimately shoulder the just compensation to be paid to PIATCO, it should be allowed to intervene in the expropriation proceedings.155
A Final Note
The BOT Law, as amended, was enacted to mobilize the resources of the private sector for the economic development of the country. AEDC took one step further and submitted an unsolicited proposal. The BOT scheme, no matter how laudable its objectives, will not attain its ends if the legal rights of an original proponent under the law are not recognized.
It may be claimed that maintaining the nature of NAIA IPT III as a BOT project is inherently incompatible with the continuation of the expropriation proceedings. I think not. The vested right of AEDC to be awarded the project should be balanced with the legal authority of the government to expropriate the terminal. The right of AEDC does not nullify the authority of the government and vice versa. In the absence of any prohibition under our laws, this Court should uphold both.
With due respect to the majority, AEDC should be allowed to pursue the project it conceived, designed and proposed. This will uphold its rights as an original proponent under the BOT Law, satisfy the just compensation owing to PIATCO at no cost to the government and finally bring about the long overdue operationalization of NAIA IPT III as committed by the Philippine government on January 25, 2008 at the World Economic Forum in Davos, Switzerland, not to mention the generation of the revenues that the government is entitled to under the BOT Law. Ultimately, it is public welfare that will benefit from the operation of a fully functional world-class airport terminal.
The finality of this decision will effectively end the first phase of the expropriation proceedings given that we have categorically upheld the legal authority of the Republic to expropriate NAIA IPT III. There should be no more hindrance to the determination by the expropriation court of the final amount of just compensation (in accordance with law and equity) to be paid to PIATCO. As we have also ruled on the issues raised by Baterina, there is no need to maintain CA-G.R. SP No. 95539. Hence, it is dismissed.
Accordingly, I vote that the petition for mandamus and prohibition in G.R. No 169914 be GRANTED. Respondents, their officers, agents, successors, representatives or persons or entities acting on their behalf should be ordered to:
1) formally award the NAIA IPT III project to AEDC;
2) execute and formalize with AEDC the approved draft concession agreement (with a provision on the assignment to and assumption by AEDC of the national government's obligation to pay just compensation to PIATCO) and
3) cease and desist from entering into any concession contract with third parties for the operation of the NAIA IPT III project.
On the other hand, the petition for certiorari and prohibition in G.R. No. 174166 should be DISMISSED for being moot and academic.
RENATO C. CORONA
Associate Justice
Footnotes
1 Penned by Associate Justice Renato C. Dacudao (retired) and concurred in by Associate Justices Rosmari D. Carandang and Estela M. Perlas-Bernabe of the Eighth Division of the CA; rollo (G.R. No. 174166), pp. 60-61.
2 G.R. Nos. 155001, 155547, 155661 (450 Phil. 744).
3 G.R. No. 166429, 478 SCRA 474.
4 An Act to Facilitate the Acquisition of Right-of-Way, Site or Location for National Government Infrastructure Projects and for Other Purposes.
5 In his capacity as Secretary of Transportation and Communication.
6 Rollo (G.R. No. 169914), p. 58.
7 This was rendered moot when the CA issued a resolution dated September 8, 2006 lifting the TRO issued by virtue of the August 24, 2006 resolution and setting aside the said resolution.
8 Rollo (G.R. No. 174166), pp. 53-54.
9 Supra note 2, at 788-789.
10 Rollo (G.R. No. 169914), pp. 107-108.
11 Supra note 2, at 788-796.
12 Rollo (G.R. No. 169914), p. 297.
13 The causes of action were the following:
"FIRST CAUSE OF ACTION
58. x x x [T]he Joint Venture has failed to fulfill the requirements to prequalify since: (a) the designated facility operator of the Joint Venture for the [NAIA IPT III] Project does not possess the nationality requirement imposed by the Constitution, the BOT Law, the IRR and the PBAC Bid Documents and Bulletins; and (b) the Joint Venture does not possess the minimum financial capability to qualify as a challenge bidder for the NAIA IPT III Project as required by the BOT law, the IRR and the PBAC Bid Documents and Bulletins.
59. The prequalification of the Joint Venture being contrary to the Constitution, the law, the IRR and the Bid Documents and Bulletins, as well as being attended with serious irregularities, all proceedings in connection therewith should be declared null and void and the Joint Venture should be declared disqualified as a challenge bidder to the NAIA IPT III Project.
SECOND CAUSE OF ACTION
xxx xxx xxx
61. There being no valid and legal challenge bid, respondents, and all persons doing under them, should be permanently enjoined from conducting proceedings on the challenge bid of the Joint Venture which is void ab initio, including the awarding of the subject Concession Agreement, and the implementation of said Concession Agreement if already awarded. Thus, respondents should be directed to act on petitioner's unsolicited proposal without considering the void challenge bid of the Joint Venture.
THIRD CAUSE OF ACTION
xxx xxx xxx
63. Assuming arguendo that the Joint Venture has legally fulfilled the requirements for prequalification set under the BOT Law and the IRR, it should still be disqualified for failing to comply with the mandatory requirements within the periods prescribed under the BOT law and the IRR.
64. Pursuant to the same BOT Law, the DOTC should award the NAIA IPT III Project to petitioner, in the absence of any other qualified proponent submitting a competitive bid in an unsolicited proposal." (Id. at 333-335.)
14 AEDC's Memorandum, p. 4. The order issued by First Vice-Executive Judge Alfredo C. Flores states in full:
"Submitted for resolution is a 'Joint Motion To Dismiss.'
Extant on the motion is the signature of Lucio C. Tan in representation of [AEDC] assisted by the Law Firm of Carpio Villaraza & Cruz. The Secretary of [DOTC], the Honorable Vicente C. Rivera, Jr., on his behalf and on behalf of the other respondents, signed, assisted by the Solicitor General, the Honorable Ricardo P. Galvez. It bears the Conforme of the Executive Secretary, the Honorable Ronaldo B. Zamora.
Finding the "Joint Motion To Dismiss" in order, being premised upon amicable settlement, let this case be, as it is hereby DISMISSED with prejudice. Cost de oficio.
SO ORDERED."
15 The motion states in full:
"JOINT MOTION TO DISMISS
The parties, assisted by their respective counsel, respectfully state:
1. [PIATCO] and the respondents have submitted to petitioner [AEDC], through the Office of the Executive Secretary, Malacañang, a copy of the Concession Agreement (attached as Annex "A") which they executed for the construction and operation of the [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 one 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.
PRAYER
WHEREFORE, it is respectfully prayed that the instant case be dismissed." (Id. at 349-350.)
16 Supra note 2, at 678-679.
17 Id., p. 678.
18 Presided by Judge Henrick Gingoyon (now deceased). He was replaced by Judge Jesus B. Mupas.
19 Supra note 3, at 548-550.
20 Together with Clavel Martinez, Hermy Banico, Francisco B. Mero and Carlito P. Rallistan; rollo, (G.R. No. 174166), p. 20.
21 Id., p. 21.
22 Baterina's Comment with Prayer for Affirmative Reliefs, p. 6.
23 Id., p. 7.
24 Rollo (G.R. No. 169914), p. 31.
25 Id., p. 364.
26 Rollo (G.R. No. 174166), p. 21.
27 Id., pp. 21-22.
28 Supra note 22, at 13.
29 481 SCRA 457.
30 Rollo (G.R. No. 174166), p. 23.
31 Supra note 22, at 16.
32 Rollo (G.R. No. 174166), p. 24.
33 Id.
34 Id.
35 Id., p. 25.
36 Id., p. 26.
37 Id.
38 The other intervenors did not join Baterina in the petition before the CA; id., p. 27.
39 Id., pp. 27, 363-365. In the petition entitled "Salacnib F. Baterina v. Hon. Jesus B. Mupas, in his capacity as Acting Presiding Judge of the [RTC] of Pasay City, Branch 117, Republic of the Philippines, [DOTC], [MIAA], and [PIATCO]," Baterina sought the following reliefs:
"A. Upon the filing of this Petition, to issue a [TRO] directing Public Respondent Judge to desist and desist from implementing the assailed Orders or otherwise causing payment of the proffered amount to PIATCO, and from further proceeding with the determination of just compensation in the expropriation case until such time that:
i. Petitioner's Motion to Declare in Default and Motion for Partial Summary Judgment shall have been received by the [RTC];
ii. It is clarified that PIATCO categorically disputes the proffered value for [NAIA IPT III];
iii. It is clarified that Public Respondents have been specifically authorized by the President of the Republic of the Philippines to file the Complaint for expropriation of [NAIA IPT III].
B. After further proceedings, to issue a Writ of Preliminary Injunction restraining Public Respondent Judge to cease and desist from implementing the assailed Orders or otherwise causing payment of the proffered amount to PIATCO, and from further proceeding with the determination of just compensation in the expropriation case until such time that:
i. Petitioner's Motion to Declare in Default and Motion for Partial Summary Judgment shall have been resolved by the [RTC];
ii. It is clarified that PIATCO categorically disputes the proffered value for [NAIA IPT III]; and
iii. It is clarified that Public Respondents have been specifically authorized by the President of the Republic of the Philippines to file the Complaint for expropriation of [NAIA IPT III].
C. To declare and set aside as null and void the Orders dated 27 March 2006 and 15 June 2006 and the Writ of Execution dated 27 March 2006.
D. To direct the [RTC] of Pasay City, Branch 117, to forthwith [resolve] Petitioner's Motion to Declare in Default and Motion for Partial Summary Judgment dated 22 March 2006.
Other reliefs, just and equitable in the premises, are likewise prayed for."
40 Id., pp. 28-29.
41 Id., p. 29.
42 Republic of the Philippines, DOTC, MIAA and PIATCO; id., p. 60.
43 The order and writ of execution both dated March 27, 2006 and order dated June 15, 2006; id., p. 301.
44 Id., pp. 60-61.
45 Republic's Consolidated Memorandum, p. 12.
46 Id.
47 Land Bank Manager's Check No. 0000008082; id.
48 Id.
49 Id.
50 This was consolidated with CA-G.R. SP No. 95583 entitled "Manuel L. Fortes, Jr. v. Hon. Jesus B. Mupas, in his capacity as Acting Presiding Judge of the Regional Trial Court of Pasay City, Branch 117, Republic of the Philippines, Department of Transportation and Communications, Manila International Airport Authority and Philippine International Air Terminals Co., Inc." in a resolution dated October 13, 2006.
51 Associate Justice Estela M. Perlas-Bernabe was replaced by Associate Justice Monina Arevalo Zenarosa in the Special Former Eighth Division.
52 Rollo (G.R. No. 169914), p. 33.
53 Supra note 45, at 35.
54 Supra note 14.
55 Balanay v. Paderanga, G.R. No. 136963, 28 August 2006, citations omitted.
56 Martir v. Verano, G.R. No. 170395, 28 July 2006.
57 Philippine National Oil Company-Energy Development Corporation (PNOC-EDC) v. Abella, G.R. No. 153904, 17 January 2005, 448 SCRA 549, 566.
58 Nabus v. Court of Appeals, G.R. No. 91670, 7 February 1991, 193 SCRA 732, 741.
59 Supra note 53.
60 G.R. No. 100156, 27 June 1994, 233 SCRA 384.
61 Id., p. 389.
62 Sanchez v. Court of Appeals, G.R. No. 152766, June 20, 2003.
63 Herrera, Comments on the 1997 Rules of Civil Procedure as Amended (1st Ed., 1997), p. 22, citing Pacific Asia Overseas Shipping Corp. v. NLRC, G.R. No. 76595, 6 May 1988, 161 SCRA 122; The International Corporate Bank, Inc. v. The Intermediate Appellate Court et al., G.R. No. 69560, 30 June 1988, 163 SCRA 296.
64 De Leon v. Balinag, G.R. No. 169996, 11 August 2006.
65 Act Amending Certain Sections of Republic Act No. 6957, Entitled "An Act Authorizing the Financing, Construction, Operation and Maintenance of Infrastructure Projects by the Private Sector, and for Other Purposes."
66 Rollo (G.R. No. 169914), pp. 35-38.
67 Id.
68 Id.
69 Id., pp. 41 and 44.
70 Id., pp. 451-452.
71 Supra note 2, at 667.
72 RA 6957 (1990), as amended by RA 7718 (1994), Sec. 1.
73 Art. II, Sec. 20.
74 On Senate Bill No. 1586.
75 Now incumbent President of the Republic of the Philippines.
76 January 25, 1994, Senate deliberations; rollo (G.R. No. 169914), p. 75.
77 Id.
78 March 1, 1994, Senate deliberations; id. at 369.
79 Counsel of AEDC stated during the oral arguments on November 14, 2006 that his client spent around P180,000,000 for its expenses as original proponent; TSN, p. 71.
80 Majority opinion, p. 22.
81 Supra note 10.
82 Id.
83 Supra note 2, at 653 and 679.
84 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 at 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. xxx
85 University of San Agustin, Inc. v. Court of Appeals, G.R. No. 100588, 7 March 1994, 230 SCRA 761, 771, citations omitted.
86 BPI Family Savings Bank, Inc. v. Manikan, G.R. No. 148789, 16 January 2003, 395 SCRA 373, 375, citing Pacheco v. Court of Appeals, 389 Phil. 200 (2000).
87 Pacheco v. Court of Appeals, id. at 203, citation omitted.
88 Supra note 84.
89 Rule 11, Sec. 11.1. Recommendation to Award. - Within seven (7) calendar days from the date the financial evaluation shall have been completed, the Agency/LGU PBAC will submit a recommendation of award to the Head of Agency/LGU. The PBAC will prepare and submit a detailed evaluation/assessment report on its decision regarding the evaluation of the bids and explain in clear terms the basis of its recommendations.
90 Rule 11, Sec. 11.2. Decision to Award. – Within seven (7) calendar days from the submission by PBAC of the recommendation to award, the Agency/LGU Head shall decide on the award. The approval shall be manifested by signing and issuing the Notice of Award to the awardee within seven (7) calendar days from approval thereof.
91 Rollo (G.R. No. 169914), p. 454.
92 Supra note 2, at 656.
93 AEDC's Memorandum, p. 35.
94 Id., p. 36.
95 Id., p. 43.
96 Id.
97 TSN of November 14, 2006 Oral Arguments, pp. 28, 179-180. These are the Takenaka and Asahikosan Corporations.
98 The dispositive portion of the decision states:
xxx xxx xxx
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; (Republic v. Gingoyon, supra note 3, at 550).
99 Indeed, Sec. 2 (b) of RA 6957, as amended by RA 7718, defines a BOT project as "[a] contractual arrangement whereby the project proponent undertakes the construction, including financing, of a given infrastructure facility, and the operation and maintenance thereof…."
100 Supra note 3, at 548.
101 Sec. 2. Petition for prohibition. — When the proceedings of any tribunal, corporation, board, officer or person, whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law, a 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 to desist from further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice may require. xxxx
102 Rollo (G.R. No. 174166), p. 43.
103 Supra note 28, at 470-471.
104 Rollo (G.R. No. 174166), p. 44.
105 Supra note 22, at 61.
106 Id.
107 Id., p. 63.
108 According to Baterina, this Order is now the subject of a Supplemental Petition for Certiorari and Prohibition he filed in the CA; id., pp. 67-68.
109 Integrated Bar of the Philippines v. Zamora, 392 Phil. 618, 632-633 (2000).
110 Id.
111 Id.
112 Supra note 22, at 58. In his Motion for Intervention and Motion to Admit the Petition for Prohibition in Intervention he stated:
xxx xxx xxx
2. As legislators and taxpayers, the Respondents-in-intervention have a legal interest in the matter of litigation insofar as they stand to be benefited or injured by the impending payment of just compensation by the government to defendants-in-intervention PIATCO and FRAPORT AG Frankfurt Airport Services.
3. As legislators and taxpayers, the Respondents-in-intervention have an interest in the instant case, because public funds are in danger of being misused and dissipated. It is the fundamental duty of the [Respondents]-in-intervention not only to appropriate public funds, but more importantly, to see to it that public funds are being used properly and legally.
4. Likewise, the [Respondents]-in-intervention's standing in the PIATCO cases was affirmed by the Supreme Court because as legislators, they have standing to question the disbursement of any public funds, especially if unappropriated by the legislature. The plan to compensate PIATCO and/or FRAPORT is also illegal and affects matters of transcendental importance to the nation.
5. As matters involving the nature of the PIATCO Contracts are of transcendental importance, the [Respondents]-in-intervention are not real parties in interest. They have sufficient legal interest in the matter in litigation, such that they will either gain or lose by the direct legal operation and effect of the judgment in the instant case as regards the payment of just compensation by the government to PIATCO and FRAPORT AG Frankfurt Airport Services. (Emphasis in the original)
113 Supra note 2, at 803-804, citations omitted. In the recent case of David v. Macapagal-Arroyo, a summary of the various pronouncements of this Court regarding its liberal policy on standing was provided:
"By way of summary, the following rules may be culled from the cases decided by this Court. Taxpayers, voters, concerned citizens, and legislators may be accorded standing to sue, provided that the following requirements are met:
(1) the cases involve constitutional issues;
(2) for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax measure is unconstitutional;
(3) for voters, there must be a showing of obvious interest in the validity of the election law in question;
(4) for concerned citizens, there must be a showing that the issues raised are of transcendental importance which must be settled early; and
(5) for legislators, there must be a claim that the official action complained of infringes upon their prerogatives as legislators." (Emphasis supplied) (G.R. No. 171396, 3 May 2006, 489 SCRA 160, 220-221)
114 Manifestation dated September 12, 2006 , p. 2.
115 Supra note 39.
116 The Solicitor General stated:
"It is submitted that the correct interpretation of the applicable law on the expropriation of [NAIA IPT III] could avoid the said dreaded consequences. It is further submitted that this Honorable Court had, in many similar instances where its silence on an issue will only prolong or multiply litigation, exercised the judicial prerogative to lay down the parameters for the application of a law. There is no reason for it to do otherwise now." (Supra note 45, at 44)
Baterina, on his part, stated:
"… [p]rivate respondent moves that this Honorable Court exercise its judicial discretion to relax the rules of procedure and exercise its discretion in determining whether justice would be better served if all the legal issues involved, which will not require a trial of facts, were to be given due course or otherwise be taken up by this Honorable Court." (Manifestation and Motion for Relaxation of Procedural Rules in the Exercise of this Honorable Court's Judicial Discretion, p. 13)
117 Art. VIII, Sec. 5 (5).
118 National Commercial Bank of Saudi Arabia v. Court of Appeals, G.R. No. 124267, 18 August 2004, 437 SCRA 1, 9, citations omitted.
119 Didipio Earth-Savers' Multi-Purpose Association, Incorporated (Desama) v. Gozun, G.R. No. 157882, 30 March 2006, 485 SCRA 586, 604, citing Robern Development Corporation v. Quitain, 373 Phil. 773, 792-793 (1999).
120 See Constitution, Art. III, Sec. 9.
121 Build-operate-and-transfer — 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 the 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 which shall not exceed fifty (50) years: x x x x
122 313 Phil. 296 (1995).
123 Supra note 22, at 82-90; Baterina's Memorandum, pp. 32-39.
124 Supra note 120, at 321-323, 328.
125 Supra note 3, at 521-522.
126 These rights are: the jus utendi or the right to receive from the thing what it produces; the jus abutendi or the right to consume the thing by its use; the jus disponendi or the power of the owner to alienate, encumber, transform and even destroy the thing owned; the jus vindicandi or the right to exclude from the possession of the thing owned any other person to whom the owner has not transmitted such thing; the jus possidendi or the right to possess and jus fruendi or the right to the fruits. (Austria-Magat v. Court of Appeals, G.R. No. 106755, 1 February 2002, 375 SCRA 556, 566; Distilleria Washington, Inc. v. La Tondeña Distillers, Inc., G.R. No. 120961, 2 October 1997, 280 SCRA 116, 125)
127 Supra note 3, at 512-514.
128 Reyes v. National Housing Authority, G.R. No. 147511, 20 January 2003, 395 SCRA 494, 501.
129 Id.
130 Didipio Earth-Savers' Multi-Purpose Association, Incorporated (DESAMA) v. Gozun, G.R. No. 157882, 30 March 2006, 485 SCRA 586, 613.
131 Heirs of Juancho Ardona v. Reyes, G.R. Nos. L-60553 to 60555, 26 October 1983, 125 SCRA 220, 235, citing Chief Justice Enrique M. Fernando, The Constitution of the Philippines, 2nd ed., pp. 523-524.
132 Supra note 128.
133 Id. at 614.
134 Id.
135 Supra note 129.
136 Id. at 235.
137 G.R. No. 137285, 16 January 2001, 349 SCRA 240.
138 Id. p. 262.
139 Supra note 126.
140 Id.
141 545 US 469 [2005], <www.supremecourtus.gov/opinions/04pdf/04-108.pdf > (visited February 5, 2007).
142 Id.
143 Supra note 3, at 513.
144 Baterina's Memorandum, p. 24.
145 Id. p. 57.
146 Supra note 45, at 39.
147 Supra note 2, at 603.
148 Supra note 3, at 526.
149 In the dissenting opinion of then Senior Associate Justice, now Chief Justice Puno in Gingoyon, he stated that:
… Agan involved solely the issue of the validity of the PIATCO contracts. After striking down the contracts as void, we ruled that the State must pay just compensation to PIATCO before it could exercise the right to take over considering the undeniable fact that the latter spent a considerable sum of money to build the structures comprising the NAIA IPT III. The Court, however, did not spell out a rigid formula for just compensation to be paid to PIATCO except to say that it must be according to law and equity. The Court's language was carefully crafted to give the trial court sufficient flexibility in determining just compensation considering the exchange of charges and countercharges that the cost in building the said structures was unreasonably bloated. (Emphasis supplied) (Supra note 3, at 551)
150 Aparente, Sr. v. National Labor Relations Commission, G.R. No. 117652, 27 April 2000, 331 SCRA 82, 93, citation omitted.
151 Id.
152 Id.
153 Tamio v. Ticson, G.R. No. 154895, 18 November 2004, 443 SCRA 44, 55, citation omitted.
154 In a long line of cases, this Court applied the standard of quantum meruit to null and void projects. See Republic v. CA, G.R. No. 103882, November 25, 1998; Eslao v. COA, G.R. No. 89745, April 8, 1991; F.F. Mañacop Construction Corp. v. CA and MIAA, 266 SCRA 335 and EPG Construction, et al. v. Vigilar, 354 SCRA 566.
155 AEDC has no objection to this since it stated in its Memorandum that "[t]hus it is submitted that the expropriation in the lower court may still be pursued as the equitable process by which PIATCO as the builder of NAIA IPT III may be paid compensation that is just and in accordance with law, thereby upholding the principle of unjust enrichment." (p. 51)
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