Case Digest (G.R. No. 155001)
Facts:
In Demosthenes P. Agan, Jr., et al. vs. Philippine International Air Terminals Co., Inc., et al. (G.R. Nos. 155001, 155547 & 155661; January 21, 2004), Asia Emerging Dragon Corp. (AEDC) submitted an unsolicited proposal on October 5, 1994 to the Department of Transportation and Communications (DOTC) and the Manila International Airport Authority (MIAA) for the construction of NAIA Passenger Terminal III under Republic Act No. 6957, as amended by R.A. 7718 (the BOT Law). On September 20, 1996 a consortium known as the Paircargo Consortium—composed of People’s Air Cargo and Warehousing Co., Inc., Phil. Air and Grounds Services, Inc., and Security Bank Corp.—filed a competitive proposal that the Prequalification Bids and Awards Committee found superior to AEDC’s. On July 12, 1997 the Government, through DOTC, and the consortium, now organized as Philippine International Air Terminals Co., Inc. (PIATCO), executed the 1997 Concession Agreement. That instrument was superseded by an Am...Case Digest (G.R. No. 155001)
Facts:
- Unsolicited Proposal and Competitive Bidding
- October 5, 1994 – Asia Emerging Dragon Corp. (AEDC) submits unsolicited BOT proposal to DOTC/MIAA for NAIA Passenger Terminal III (IPT III) under R.A. 6957 as amended by R.A. 7718.
- September 20, 1996 – Paircargo Consortium (People’s Air Cargo & Warehousing Co., PAGS, Security Bank) submits competitive bid; declared superior; notice of award issued; consortium reorganizes into Philippine International Air Terminals Co., Inc. (PIATCO).
- PIATCO Contracts and Supplemental Agreements
- July 12, 1997 – 1997 Concession Agreement executed (BOT build-operate-transfer, US$350 million minimum project cost, 70:30 debt-equity ratio, public utility fee regime, default provisions).
- November 26, 1998 – Amended and Restated Concession Agreement (ARCA) replaces 1997 CA; three Supplements entered (Aug 27, 1999; Sept 4, 2000; June 22, 2001).
- Judicial Proceedings and Motions
- September 17, 2002 – Petitions for certiorari and prohibition filed to annul 1997 CA, ARCA, Supplements on grounds of illegality and violation of BOT Law/Constitution.
- May 5, 2003 – Supreme Court declares PIATCO Contracts null and void. Motions for Reconsideration filed by PIATCO, Congressmen, PIATCO employees, NMTAI.
Issues:
- Procedural Jurisdiction and Standing
- Whether Supreme Court had jurisdiction over legal issues on undisputed facts versus factual disputes requiring trial court.
- Whether petitioners (service providers, MIAA employees, Congress members) had legal standing and whether Republic of the Philippines was an indispensable party.
- Prequalification and Contract Formation
- Whether Paircargo Consortium satisfied 30% equity requirement (debt-equity 70:30) at prequalification, having only 6.08% net worth.
- Whether post-award amendments (1997 CA, ARCA, Supplements) materially altered bid parameters (fees classification, financial guarantees, default remedies).
- Substantive Legality under BOT Law and Constitution
- Whether contracts include direct government guarantee contrary to BOT Law’s prohibition.
- Whether compensation clause for government’s police-power takeover in emergency violates constitutional doctrine of non-compensable police power.
- Whether grant of exclusive airport operations to PIATCO creates a monopoly requiring regulation under Constitution.
- Whether Supreme Court must defer to House committee reports validating contracts.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)