Case Digest (G.R. No. 122156)
Facts:
Manila Prince Hotel v. Government Service Insurance System, Manila Hotel Corporation, Committee on Privatization and Office of the Government Corporate Counsel, G.R. No. 122156, February 03, 1997, the Supreme Court Second Division, Bellosillo, J., writing for the Court. The petition sought prohibition and mandamus to prevent the sale of 51% of the shares of Manila Hotel Corporation (MHC) to a foreign buyer and to compel respondents to accept petitioner’s matching bid.Pursuant to the national privatization program (Proclamation No. 50, 8 Dec. 1986), respondent Government Service Insurance System (GSIS) offered by public bidding 30%–51% of the issued and outstanding shares of MHC, the corporate owner/operator of the historic Manila Hotel. The GSIS bidding rules required that the highest bidder negotiate and execute specified management, marketing/reservation, and stock purchase agreements and obtain requisite approvals before being declared the winning bidder (Guidelines, Pars. I, V). The September 18, 1995 public bidding produced two bidders: petitioner Manila Prince Hotel Corporation (a Filipino corporation) which bid for 51% and the Malaysian firm Renong Berhad which bid higher (Renong P44.00 per share versus petitioner’s lower bid).
After the bidding Renong was publicly announced as highest bidder; petitioner thereafter, by letter of 28 September 1995, tendered to GSIS a written offer to match Renong’s P44.00 per share and on 10 October 1995 sent a manager’s check of P33,000,000 as bid security, which GSIS refused to accept. Fearing consummation of the sale to Renong without giving petitioner the constitutional preference it claimed, petitioner filed a petition for prohibition and mandamus in this Court on 17 October 1995; the Court issued a temporary restraining order on 18 October 1995 enjoining consummation of the sale.
The case was initially before a Division but on 10 September 1996 was accepted by the Court En Banc after referral by the First Division. Oral arguments were heard with former Chief Justice Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., appearing as amici curiae. Respondents defended their refusal on several grounds: that Article XII, Section 10(2) of the 1987 Constitution (the “Filipino First” provision) is not self-executing and needs implementing legislation; that the phrase national patrimony covers mainly natural resources and not the Manila Hotel; that only the shares — not the land or building — were being sold; that the bidding rules did not yet permit a matching bid because Renong, as highest bidder, remained capable of being awarded...(Subscriber-Only)
Issues:
- Is Section 10, paragraph 2, Article XII of the 1987 Constitution (the Filipino First Policy) self-executing?
- Do 51% of the shares of Manila Hotel Corporation constitute property “covering the national economy and patrimony” for purposes of Section 10(2), Article XII?
- Do the acts of the GSIS in offering and selling MHC shares constitute State action subject to the constitutional mandate?
- If the above are answered affirmatively, was petitioner entitled to match the foreign bid and have the award made to it, and did GSIS commit grave abuse of discretion by refusing to accept petitioner’s matching bid?
- Is petitioner estopped from invoking the constitutional prefere...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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