Case Digest (G.R. No. 126204) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In National Power Corporation (NAPOCOR) vs. Philipp Brothers Oceanic, Inc. (PHIBRO), G.R. No. 126204, decided on November 20, 2001 under the 1987 Constitution, NAPOCOR invited bids on May 14, 1987 for 120,000 metric tons of imported coal for its Batangas plant. PHIBRO prequalified, bid, and won; NAPOCOR accepted its bid by letter dated July 8, 1987 (received July 15). Under Section V of the Bidding Terms and Specifications, PHIBRO was to ship 60,000 ±10% tons by July 20 and the same by September 4, with delivery due within 30 days of a confirmed Letter of Credit (LC). PHIBRO warned NAPOCOR on July 10 and July 23–31 of Australian strikes that threatened shipment, proposing a shared “strike-free” clause, which NAPOCOR refused. NAPOCOR opened a confirmed LC only on August 6, 1987; PHIBRO then shipped its first cargo on November 17. Meanwhile, NAPOCOR purchased coal at a higher price from ASEA and, in October 1987, barred PHIBRO from participating in subsequent bids, ostensibly for Case Digest (G.R. No. 126204) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Formation of Contract
- On May 14, 1987, NAPOCOR invited bids for 120,000 MT of imported coal for its Batangas plant; PHIBRO prequalified and bid.
- NAPOCOR accepted PHIBRO’s bid by letter dated July 8, 1987 (received July 15, 1987).
- Bidding Terms and Specifications
- Shipment schedule: 60,000 MT ±10% by July 20, 1987 and 60,000 MT ±10% by September 4, 1987.
- Delivery to occur within 30 calendar days after seller’s receipt of the Letter of Credit.
- Section XVII force majeure clause: includes “strikes” among disabling causes beyond control.
- Events Leading to Delay
- July 10–31, 1987: PHIBRO advised NAPOCOR of Australian coal‐industry strikes impeding shipment.
- PHIBRO proposed a “strike‐free” clause cost‐sharing; NAPOCOR refused.
- NAPOCOR opened a workable Letter of Credit only on August 6, 1987.
- PHIBRO effected first shipment on November 17, 1987, beyond the agreed 30‐day period.
- October 1987: NAPOCOR readvertised for coal supply; on November 24, 1987, PHIBRO was disqualified for “not meeting minimum requirements,” later traced to claimed delivery delay.
- Judicial Proceedings
- PHIBRO filed suit on December 4, 1987 in RTC Makati (Civil Case No. 18473) for injunction, actual, moral and exemplary damages, and attorney’s fees.
- NAPOCOR counterclaimed P12,436,185.73 for price differential and P500,000 for expenses.
- RTC Branch 57 (Jan. 16, 1992) ruled for PHIBRO: reinstatement as accredited bidder; awards of actual US$864,000, moral US$100,000, exemplary US$50,000, litigation US$73,231.91 and attorney’s fees; dismissed counterclaim.
- CA (Aug. 27, 1996) affirmed RTC decision in toto.
- NAPOCOR filed Rule 45 petition before the Supreme Court.
Issues:
- Liability for Delay
- Whether PHIBRO’s late delivery was excused by force majeure (strikes) and NAPOCOR’s delay in opening the LC.
- Disqualification from Bidding
- Whether NAPOCOR acted with malice or bad faith in disqualifying PHIBRO from subsequent tenders.
- Entitlement to Remedies
- Whether PHIBRO was entitled to injunctive relief and awards of actual, moral, exemplary damages, attorney’s fees, and litigation expenses.
- Counterclaims
- Whether the dismissal of NAPOCOR’s counterclaims for damages and litigation expenses was erroneous.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)