G.R. No. 160732 - Metropolitan Waterworks and Sewerage System vs. Daway

On February 21, 1997, MWSS granted Maynilad a 20-year concession to operate and refurbish water and sewerage services in the West Zone, in consideration of concession fees largely representing foreign loans.
Under Section 6.9 of the Agreement, Maynilad was required to secure its obligations by bond or bank guarantee. On July 14, 2000, it obtained an Irrevocable Standby Letter of Credit for US$120 million from Citicorp International Limited and participating banks in favor of MWSS.

Maynilad issued Force Majeure notices (March and August 2001) over peso depreciation losses; parties executed a Memorandum of Agreement (June 8, 2001) and Amendment No. 1 (October 5, 2001) providing a foreign-exchange recovery formula, equity infusion, and resumption of fee payments.
Maynilad served Notices of Event of Termination (November 5, 2002) and Early Termination (December 9, 2002); MWSS challenged the latter before the Appeals Panel, which on November 7, 2003 ruled there was no event of termination and ordered Maynilad to pay due fees. The award became final November 22, 2003.

On November 13, 2003, Maynilad filed a Petition for Rehabilitation; on November 17, 2003, RTC Quezon City, Branch 90 found the petition substantially compliant and issued a Stay Order enjoining enforcement of all claims and dispositions of Maynilad’s property.
On November 24, 2003, MWSS served a draw notice on the banks for US$98,923,640.15 under the Standby Letter of Credit. Maynilad filed two urgent ex parte motions.
On November 27, 2003, the RTC issued a Clarificatory Order declaring the draw notice violative of the Stay Order, ordering MWSS to withdraw it under pain of contempt, and voiding any payment thereunder.

MWSS filed a Rule 65 petition before the Supreme Court, alleging the Clarificatory Order was issued without or in excess of jurisdiction and with grave abuse of discretion.
MWSS’s issues included (a) whether the performance bond is part of Maynilad’s estate subject to rehabilitation; (b) whether the bond obligations are solidary; and (c) whether the RTC improperly reviewed the Appeals Panel’s award.

Did the RTC commit grave abuse of discretion or act in excess of jurisdiction by treating the Standby Letter of Credit (and banks’ assets) as part of the debtor’s estate subject to stay?

Did the RTC err in holding that the banks’ obligations under the Standby Letter of Credit were not solidary with Maynilad, thus falling within the stay order?

Did the RTC improperly allow Maynilad to collaterally attack the final and binding decision of the Appeals Panel through the Clarificatory Order?