Case Digest (G.R. No. 218388)
Facts:
Manila International Airport Authority v. Commission on Audit, G.R. No. 218388, October 15, 2019, the Supreme Court En Banc, Bersamin, J., writing for the Court. The petition seeks certiorari to nullify COA Decision No. 2012-268 (Dec. 28, 2012) and its Resolution (Jan. 26, 2015) in COA CP Case No. 2011-294, which affirmed COA Legal & Adjudication Office–Corporate Decision No. 2008-067 (Nov. 21, 2008) and sustained Notices of Disallowance (ND) Nos. (FMT) 99-00-04 (Nov. 24, 1999) and 2008-018 (Nov. 21, 2008).The dispute arises from an Agreement for Consulting Services (ACS) dated April 15, 1994 between petitioner MIAA and the ADP-JAC Consortium for the NAIA Terminal 2 Development Project, initially covering 795 man-months and specified ceiling amounts in Japanese yen and Philippine pesos, including separate line items for contingency. Because of project delays and additional works the parties executed four Supplementary Agreements (SAs) that increased man-months and revised the total cost of services and contingency allocations through SA Nos. 1–4 (ending with a fourth SA extending up to November 30, 2000 and later a SA4 increasing man-months to 1,221.65).
The COA Corporate Auditor issued ND No. (FMT) 99-00-04 (Nov. 24, 1999) initially disallowing part of the ACS remuneration as excessive; after exchanges and a COA-TSO re-evaluation some amounts were settled in August 2000 but COA LAO–Corporate later issued Decision No. 2008-067 (Nov. 21, 2008) denying remaining claims and issuing ND No. 2008-018. COA framed the disallowance on the basis that actual payments charged to “contingency” exceeded the 5% contingency ceiling under the NEDA Guidelines (Section 6.10), producing a net excess disallowance of ¥398,123,005.00 and P45,540,630.54 (COA’s reconciliation produced an additional disallowance of ¥344,425,855.00 and P42,325,363.04). MIAA appealed administratively within COA and filed for reconsideration; COA issued Decision No. 2012-268 (Dec. 28, 2012) affirming LAO-Corporate, and denied reconsideration Jan. 26, 2015.
MIAA then filed a petition for certiorari (Rule 64) before the Supreme Court, arguing (among other points) that Loan Agreement No. PH-136 (the OECF loan arising from the August 16, 1993 Exchange of Notes between the Philippines and Japan) is an executive agreement governed by international law (per Abaya v. Ebdane), tha...(Subscriber-Only)
Issues:
- Did the Commission on Audit act with grave abuse of discretion amounting to lack or excess of jurisdiction in affirming the COA-LAO decision and issuing ND Nos. (FMT) 99-00-04 and 2008-018?
- Whether Loan Agreement No. PH-136 (executed pursuant to the August 16, 1993 Exchange of Notes) is an executive agreement governed by international law, and if so whether the ACS and its Supplementary Agreements are accessory contracts that should be interpreted and implemented under international law (including the doctrine of pacta sunt servanda) rather than be subject to the NEDA Guidelines’ 5% contingency ceiling.
- Whether the supplemental agreements and the ACS show the parties’ intention that additional man‑months and the corresponding payments be charged to the revised total cost of services (and not charged against the contingency), thereby rendering COA’s chara...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)