Case Summary (G.R. No. 189272)
Pertinent Dates and Applicable Law
- Decision date: April 7, 2009, applying the 1987 Philippine Constitution.
- Governing statute: Republic Act No. 6957 (BOT Law), as amended by Republic Act No. 7718, including its Implementing Rules and Regulations (IRR).
- Preceding critical decisions: Agan, Jr. v. Philippine International Air Terminals Co., Inc. (declaring the contracts with PIATCO void) and Republic v. Gingoyon (on government expropriation proceedings).
Summary of AEDC’s Arguments in Motion for Reconsideration
AEDC, as the original proponent of the NAIA IPT III Project, asserts it holds vested legal and contractual rights under the BOT Law requiring recognition. It contends the Supreme Court's characterization of the process for unsolicited proposals as a form of public bidding was erroneous. AEDC emphasizes its right under Section 4-A of the BOT Law to match the lowest or most advantageous proposal following the governmental invitation for comparative proposals. It argues that even if the disqualification of PIATCO were affirmed, AEDC should be entitled to rights or remedies rather than losing eligibility due to PIATCO’s prior commencement of project implementation.
AEDC further maintains that following the nullification of PIATCO contracts, a renewed invitation for comparative proposals should be issued with AEDC’s right to match reinstated. It challenges the initiation of expropriation proceedings against the project’s facilities and asserts the government should use the fair valuation from expropriation as a floor price for new bidding. AEDC also denies any lack of financial qualification, warning that a contrary finding may jeopardize government’s position in international arbitration.
Finally, AEDC insists the Memorandum of Understanding (MOU) executed between it and the DOTC should not have been discounted since it creates binding obligations affecting rights and duties. It asserts its petition is timely filed and not barred by res judicata.
Supreme Court’s Legal Analysis on AEDC’s Motion
The Court rejected AEDC’s motion, reiterating that the mere status as the original proponent does not entitle AEDC to automatic award of the NAIA IPT III Project. Rights under Section 4-A of the BOT Law are conditional: upon receipt of comparative bids, the original proponent must exercise the right to match the lowest or most advantageous bid within thirty days to qualify for award preference.
The Court explained that the process of unsolicited proposals under the BOT Law's IRR involves a “Swiss Challenge” mechanism, which requires public invitation for comparative proposals, evaluation, and possible negotiation. The original proponent’s right to match the offer is contingent upon the existence of a valid comparable bid. This process, although providing preferential treatment, constitutes a form of public bidding ensuring competition and fair comparison.
In the present case, the Pre-Qualification Bids and Awards Committee (PBAC) had found the competing PIATCO bid more advantageous. Even though PIATCO was later disqualified due to failure to meet equity requirements, the proposal itself was considered financially feasible and superior. AEDC failed to match PIATCO’s offer within the prescribed period, thereby forfeiting its preferential right. Moreover, AEDC’s earlier challenge to PIATCO’s qualification and the joint motion to dismiss related proceedings weakened its claim to entitlement.
The Court underscored that the NAIA IPT III Project had progressed substantially with government possession and operation after payment of just compensation to PIATCO in expropriation proceedings, precluding reopening bids or reawarding the project. Returning the project to the private sector, such as to AEDC, after completion and transfer to government, would be a retrograde step and disregards the BOT scheme’s ultimate goal for government control post-operation.
On the Memorandum of Understanding (MOU)
The Court was not convinced of the authenticity or binding effect of the MOU submitted by AEDC, noting deficiencies such as lack of notarization, certification by signatories, and proper validation. Even assuming its validity, the Court emphasized the document merely reflected commitments to procedural compliance, not an unconditional government obligation to award the project to AEDC.
Procedural Defects: Timeliness and Res Judicata
The petition was barred for being filed beyond a reasonable time, as it was lodged 20 months after the final and executory ruling on the nullity of PIATCO’s contracts. The Court observed that government’s expropriation action and refusal to recognize AEDC’s rights were clear indicators that AEDC's claim became ripe before the filing date.
Regarding res judicata, the Court held that the prior dismissal, with prejudice, of AEDC’s case in the Pasig Regional Trial Court bars the present petition. The Court invoked its authority to recognize such bar even if the defense was not formally pleaded by respondents, under the Revised Rules of Court.
Supreme Court’s Resolution on AEDC’s Motion
The Court denied AEDC’s motion for reconsideration, affirming no entitlement to the project award as original proponent. It reinforced the interpretation of Section 4-A’s conditional rights in the Swiss Challenge process, the finality of the expropriation and operation status, and the procedural impediments.
Arguments and Supreme Court's Findings on Salacnib F. Baterina’s Motion for Reconsideration
Baterina claimed that issues on ownership of NAIA Terminal 3 and the propriety of compensation to PIATCO were not moot or academic and that he was denied due process to present his arguments.
The Court rejected these assertions, stressing Baterina lacked legal standing and interest to intervene in the expropriation proceedings and related judicial processes. His previous motions for intervention were denied for lack of legal interest, failure to comply with procedural requirements, and untimeliness. The Court ruled that the expropriation proceedings and prior Supreme Court decisions conclusively settled ownership issues and affirmed PIATCO’s right to just compensation.
Consequently, Baterina’s attempt to litigate these issues anew or to invoke suspicions of corruption without sufficient basis was dismissed. The Court upheld the authority of the Pasay RTC and
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Case Background and Procedural History
- The case involves Asia's Emerging Dragon Corporation (AEDC) as petitioner against the Department of Transportation and Communications (DOTC), its Secretary Leandro R. Mendoza, and the Manila International Airport Authority (MIAA) as respondents concerning the Ninoy Aquino International Airport International Passenger Terminal III (NAIA IPT III) project.
- AEDC originally submitted an unsolicited proposal for the BOT (Build-Operate-Transfer) project of NAIA IPT III.
- The government later awarded the project to Philippine International Air Terminals Co., Inc. (PIATCO) after a bidding process, which was later declared null and void due to PIATCO’s lack of financial qualification.
- AEDC filed petitions for mandamus and prohibition to recognize its rights as the original proponent entitled to the project.
- The Supreme Court issued a decision dated April 18, 2008, dismissing AEDC’s and Salacnib Baterina’s petitions for lack of merit and mootness respectively.
- Motions for reconsideration by AEDC and Baterina followed, which were denied with finality by the Court.
AEDC’s Motion for Reconsideration: Core Arguments and Legal Contentions
- AEDC claims vested legal and contractual rights as the original proponent of the NAIA IPT III project under the BOT Law should be respected and recognized.
- Asserts that the process of unsolicited proposals under Section 4-A of the BOT Law is distinct from standard public bidding and grants the original proponent protective rights.
- Contends that the declaration of voidness of PIATCO contracts should have reinstated AEDC’s rights, including an opportunity to match competing proposals under Section 10.11 of the BOT Law’s IRR.
- Argues government’s expropriation proceedings for the NAIA IPT III facilities were premature and should use just compensation as a floor price for any new bidding process.
- Requests reinstatement of AEDC’s right to match the lowest competitive proposal if a new bidding proceeds.
- Denies any factual basis for AEDC’s financial disqualification claims asserted against it, warning this could prejudice the government in international arbitration with PIATCO.
- Clarifies AEDC’s compliance with technical specifications and agreements despite deviations made by PIATCO.
- Critiques the Court’s questioning of the Memorandum of Understanding (MOU) between AEDC and DOTC, emphasizing reliance on it and warning against unilateral government breaches without consequences.
- Contends petition is timely and not barred by the prior dismissal in the Pasig RTC case, asserting that res judicata does not apply to the instant case.
- Asserts that the mutual obligations under the prior compromise agreement have ceased, because government now agrees that the award to PIATCO was illegal.
Supreme Court’s Analysis and Resolution on AEDC’s Motion
- The Court reiterates the legal nature of rights accorded to the original proponent under Section 4-A of the BOT Law and the corresponding Implementing Rules and Regulations (IRR).
- Clarifies that the original proponent’s special rights arise only when competitive proposals are submitted and that the proponent has the right to match the lowest or most advantageous bid within 30 working days.
- Since AEDC failed to timely match the more advantageous proposal submitted by PIATCO, it lost its preferential right to the project.
- Dismisses AEDC’s claim that PIATCO’s financial proposal was unqualified as the feasibility of PIATCO’s financial proposal was never contested.
- Recognizes that the process embodied in Rule 10 of the IRR of the BOT Law for unsolicited proposals includes fundamental features of public bidding, such as public offers, competition, and comparable bid evaluation.
- Emphasizes that the unsolicited proposal process involves a “Swiss Challenge” where the original proponent may match a better proposal, after which award is granted.
- Declares that all processes following BIAC specifics and contract awards till the 18 April 2008 Decision are closed, and the nearly completed NAIA IPT III project cannot be reset to initial bidding stages.
- Notes the government’s expropriation proceedings for just compensation to PIATCO for the facilities constructed, highlighting that the governmen