G.R. No. 200658 - Lamadrid vs. Cathay Pacific Airways Limited

The case arose from a petition for certiorari challenging the dismissal of a complaint filed by the Office of the Solicitor General (OSG) for violation of the Anti-Graft and Corrupt Practices Act (R.A. No. 3019).
The complaint, initiated on February 12, 1990 before the Presidential Commission on Good Government (PCGG) and subsequently referred to the Ombudsman (docketed as OMB-0-90-2808), alleged that high-ranking private respondents, including Eduardo M. Cojuangco, Jr. and other members of the UCPB Board, manipulated government transactions for personal gain.
The allegations centered on irregularities in a contract executed between the National Investment Development Corporation (NIDC) and Agricultural Investors, Inc. (AII), which was connected to the development of a coconut seed garden in Palawan.

On November 20, 1974, at the instigation of respondent Cojuangco, Jr., AII (controlled by him) and NIDC entered into a Memorandum of Agreement (MOA) whereby AII was granted the exclusive right to develop a coconut seed garden on its property in Bugsuk Island, Palawan, and to supply the hybrid seednuts to NIDC.
This MOA emerged in the context of Presidential Decree No. 582 (issued in 1974) which established the Coconut Industry Development Fund (CIDF) meant to finance a national coconut-replanting program.
Subsequent developments included:

The issuance of P.D. No. 1468 (June 11, 1978) replacing NIDC with the United Coconut Planters Bank (UCPB) as administrator-trustee of the CIDF.
The lifting of the coconut levy on August 27, 1982, which led UCPB to terminate its agreement with AII effective December 31, 1982.
An arbitration process wherein a Board of Arbitrators, formed under the MOA’s arbitration clause, awarded liquidated damages to AII, later “noted” by the UCPB Board through Resolution No. 111-83 on April 19, 1983, effectively allowing the arbitral award to lapse.

The complaint filed by the Solicitor General contained detailed allegations regarding the one-sided nature of the MOA, such as:

Provisions that shielded AII from liabilities while imposing strict obligations on NIDC regarding payment and performance.
Inconsistencies in contract provisions—one part exempted losses due to force majeure while another held NIDC liable for payment regardless.

The Graft Investigation Officer (GIO), initially through GIO Manuel J. Tablada and later GIO I Emora C. Pagunuran, recommended dismissal of the complaint on the ground that the alleged violation had prescribed.

The prescription period was reckoned from the date of the MOA (November 20, 1974) while the complaint was filed on February 12, 1990, exceeding the ten-year prescriptive period set under R.A. No. 3019.

The OSG proceeded with a motion for reconsideration on September 11, 1998, arguing that:

The offense pertained to ill-gotten wealth and was thus imprescriptible under constitutional provisions.
Void contracts (and their one-sided terms) should not be subject to ratification or confirmation through legislative acts (i.e., P.D. Nos. 961 and 1468).

The Ombudsman, however, denied the motion for reconsideration on September 25, 1998, and the petition for certiorari was eventually filed on December 28, 1998, albeit slightly beyond the set reglementary period—a point later addressed on retroactive procedural grounds.

The dismissal was primarily based on the ground of prescription under the special prescription rule of Act No. 3326, as the alleged crime was considered to have been committed with the inception of the MOA in 1974.
The case involved unique issues regarding the timing of discovery of the offense:

The Solicitor General contended that owing to the conspicuous nature of the transactions (executed during the Marcos regime), the offense could only have realistically been discovered after the EDSA Revolution (February 1986).
Thus, he argued that the prescription period should be counted from the date of discovery rather than the commission of the act.

Additionally, the alleged “legislative imprimatur” provided by P.D. Nos. 961 and 1468 did not bar the application of R.A. No. 3019 against the respondents, despite attempts to insulate them under the guise of ratification.

The petition for certiorari was challenged as being filed 15 days beyond the 60-day period provided under the Rules of Civil Procedure.
However, due to the retroactive application of procedural amendments (specifically A.M. No. 00-2-03-SC), the petition was ultimately found to be timely filed.

Whether the Ombudsman committed grave abuse of discretion by dismissing the complaint on the ground of prescription.

The issue primarily revolves around the computation of the prescriptive period: whether it should run from the date of the commission of the act (1974) or from the later date of its discovery (post-1986).
The Solicitor General’s argument that the offense, connected with the exercise of ill-gotten wealth recovery, is imprescriptible was also raised.

Whether the Ombudsman committed grave abuse of discretion by deeming that there was no basis to indict the private respondents for violation of R.A. No. 3019 based on the allegedly one-sided MOA, purportedly ratified by legislative measures (P.D. Nos. 961 and 1468).

Here, the question is whether the contractual ratification and confirmation under the said presidential decrees shield the private respondents against charges under the Anti-Graft and Corrupt Practices Act.
The issue also involves balancing the proscriptions of the special law with constitutional provisions regarding ex post facto laws and the recovery of ill-gotten wealth.