G.R. No. 212686 - Osmena III vs. Power Sector Assets and Liabilities Management Corp.

Petitioner: Senator Sergio R. Osmeña III, seeks to enjoin the sale of the Naga Power Plant Complex (NPPC) to SPC Power Corporation (SPC) and declares the right to top stipulation in the Lease Agreement void.
Respondents: Power Sector Assets and Liabilities Management Corporation (PSALM), Emmanuel R. Ledesma, Jr. (PSALM President & CEO), SPC Power Corporation (a joint venture between Salcon Power Corporation and Korea Power Corporation), and Therma Power Visayas, Inc. (TPVI, subsidiary of AboitizPower).
PSALM is a government corporation tasked with privatizing the National Power Corporation's (NPC) assets under Republic Act No. 9136 (EPIRA).

52.5 MW Cebu 1 coal-fired thermal power plant
56.8 MW Cebu 2 coal-fired thermal power plant
43.8 MW Cebu Diesel Power Plant 1 (six 7.3 MW units), totaling an installed capacity of 153.10 MW.

Land-Based Gas Turbine (LBGT) power plant: 55 MW facility on a 5,504.02 sqm lot inside the same compound.
On October 16, 2009, the 55-MW LBGT was privatized by PSALM through negotiated sale to SPC, which also leased the land for 10 years via Land Lease Agreement (LBGT-LLA) expiring January 29, 2020.
The LBGT-LLA included SPC’s right to top (preferential right to outbid others) for sale or lease of properties in vicinity but outside the leased premises.

December 27, 2013: PSALM initiated a third round of bidding for the NPPC (153.1 MW). Only SPC and TPVI submitted bids.
March 31, 2014: TPVI declared highest bidder offering P1,088,800,000, compared to SPC’s P858,999,888.88.
April 29, 2014: PSALM notified SPC of TPVI's winning bid and reminded SPC of its right to top under LBGT-LLA.
May 7, 2014: SPC exercised its right to top by offering P1,143,240,000, asserting the lease term should be 25 years from closing (contrary to PSALM’s 10-year term).

PSALM sought legal opinion from the Office of the Government Corporate Counsel (OGCC); initial opinion upheld PSALM’s position limiting lease term to remaining period until 2020.
Further OGCC and Department of Justice (DOJ) opinions indicated SPC’s right to top relates to the NPPC Asset Purchase Agreement and Land Lease Agreement, not just the LBGT-LLA.
July 25, 2014: PSALM Board declared SPC the winning bidder after exercising right to top; Notice of Award issued July 28, 2014; properties turned over September 25, 2014.

June 16, 2014: Petitioner filed a petition to enjoin SPC’s exercise of right to top, to declare the right itself void, and to prevent further acts in implementation thereof.
Respondents filed comments; SPC contended the petition was moot after Board’s declaration. Petitioner filed supplemental pleadings requesting early resolution due to risks of irreversible acts if SPC takes possession.
Petitioner argued the right to top was a gratuitous concession without separate consideration, contrary to public bidding laws (RA 9136, RA 9184), violated public policy, and was designed to keep competition away.

SPC questioned petitioner’s standing and timeliness, claimed the right to top was valid, supported by DOJ opinion, and that the bidding was equal among bidders.
PSALM justified the inclusion of right to top clauses in other privatizations and its compliance with DOJ/OGCC opinions.
TPVI defended petitioner’s standing, insisted certiorari was proper, challenged SPC’s right to top as inconsistent with public bidding and also argued SPC failed to timely exercise the right and misapplied lease terms.

Is a petition for certiorari the proper remedy, and was it timely filed?
Does petitioner possess legal standing to question the validity of SPC’s right to top?
Do right to top provisions in PSALM’s land lease agreements contravene public policy on competitive bidding?
Did PSALM commit grave abuse of discretion in allowing SPC’s exercise of the right to top under the LBGT-LLA?