Case Summary (G.R. No. 229490)
Petitions and Proceedings
• G.R. No. 229490: Petition by La Filipina et al. for writ of attachment against Harbour Centre.
• G.R. No. 230159: Cross‐petition by Harbour Centre challenging judgment affirming dredging obligation and damages.
• G.R. No. 245515: Petition by La Filipina et al. to reinstate trial court’s jurisdiction over their Motion for Payment (reimbursement of dredging costs).
• Trial Court (October 11, 2011): Ordered Harbour Centre to dredge to –11.5 m MLLW, honor priority berthing and handling‐charge formula; awarded actual, exemplary, attorney’s fees and liquidated damages; made PLN 150 million bond returnable to plaintiffs; made TRO permanent.
• Court of Appeals (June 15, 2016 Decision, January 23, 2017 Resolution): Affirmed trial court with modifications—reduced attorney’s fees to ₱5 million; computed liquidated damages to October 24, 2014. Denied writ of attachment plea. Special Sixteenth Division (October 10, 2018 Decision, February 26, 2019 Resolution) held trial court lacked jurisdiction over Motion for Payment.
Key Dates
• 1997 – Invitation to locate at Manila Harbour Centre.
• November 19, 2004 – Execution of Memorandum of Agreement (MOA).
• December 6, 2004 – First notice of vessel running aground.
• October 11, 2011 – Trial court decision.
• June 15, 2016 – CA Decision.
• March 1, 2023 – Supreme Court Decision.
Applicable Law
• 1987 Philippine Constitution (decision post-1990).
• Civil Code (Arts. 1308, 1317, 1359, 2226–2227).
• Rules of Court: Rule 45 (Certiorari), Rule 57 (Attachment).
• Court of Appeals Internal Rules.
• BP 129 (Court of Appeals original maritime jurisdiction).
• PPA Memorandum Circular No. 32-96.
Jurisdiction over the Case
The dispute—non-performance of dredging, priority berthing rights, handling‐charge formula—is essentially maritime in nature. Under Batas Pambansa Blg. 129 and this Court’s prior ruling in G.R. 191789, the Regional Trial Court sitting as a special commercial court had subject‐matter jurisdiction, affirmed by the CA and unchallenged by petitioners.
Validity and Binding Effect of the MOA
• Harbour Centre’s claim that the MOA was ultra vires and lacked board authority fails. The corporation impliedly ratified the MOA by accepting and retaining advance handling‐charge payments under its terms. Its board‐issued Secretary’s Certificates empowered officers to secure loans and receive proceeds, thereby validating the MOA.
• The argument that the MOA lacked cause or consideration raises purely factual questions not cognizable under Rule 45. No recognized exception to conclusive factual findings exists.
Reformation of the MOA
Harbour Centre’s belated plea for equitable reformation—citing changed berth demand, subsoil conditions, inequitable terms—was never raised or supported by evidence below. Reformation requires proof of mistake, fraud, inequitable conduct or accident affecting mutual intent, none of which was shown.
Actual Damages for Breach of Priority Berthing Rights
La Filipina et al. proved Harbour Centre’s breach of their barges’ priority berthing rights (20 barges refused berthing despite verbal and written notices), incurring documented expenses of ₱6,477,265.23. The award of actual damages is sustained, as receipts, invoices and operator admissions constituted competent proof.
Liquidated Damages for Dredging Obligations
Under MOA Section 6, Harbour Centre guaranteed maintenance dredging to –11.5 m MLLW and agreed to penalty of USD 2,000/day for non-compliance. Multiple hydrographic surveys (2005–2008) and vessel groundings established breaches. The SC upholds liability for liquidated damages but, exercising equitable reduction under Arts. 2226–2227 and relevant precedents, reduces the penalty to USD 1,000/day from December 6, 2004 to October 24, 2014.
Increase in Port and Cargo Handling Charges
MOA Sections 2–3 prescribe a two-stage PHP 50/MT increase and thereafter a formula tied to PPA‐approved rates with 15-day written notice. Harbour Centre’s unilateral rate hike without MOA-mandated notice violated contract and is invalid.
Rent for Unloading Equipment Space
The MOA and January 11, 1999 lease letter waived rent for apron and equipment space. PPA Memorandum Circular No. 32-96 expressly prohibits rental fees for cargo‐handling equipment areas. Harbour Centre’s rent demands are invalid.
Trial Court Jurisdiction over Motion for Payment
La Filipina et al. filed a Motion for Payment (reimbursement of dredging costs incurred under a court‐authorized dredging contract) before the Regional Trial Court as an offshoot of the execution pending appeal. Under Rule 39, Sec. 10(a), the court may order performance by another at the delinquent party’s expense. The SC reinstates the trial court’s order and affirms its jurisdiction to resolve reimbursement.
Writ of Attachment
La Filipina et al.’s application under Rule 57 cited Harbour Centre’s fraud in performance and asset disposal with intent to defraud creditors. The CA erroneously denied the m
Case Syllabus (G.R. No. 229490)
Facts of the Case
- La Filipina Uy Gongco Corp. (“La Filipina”) and Philippine Foremost Milling Corp. (“Philippine Foremost”), both agribusiness importers and traders, purchased port‐fronting land at Manila Harbour Centre in 1997.
- Harbour Centre Port Terminal, Inc. (“Harbour Centre”) operated the port; sister companies R-II Builders, Inc. and Landtrade Properties invited La Filipina et al. to locate there, promising specific port services.
- Promised port services included priority berthing of foreign bulk and coastwise vessels, deep water berth (190–225 m vessels), free use of the apron, construction and parking of rail‐mounted mobile unloading towers, an underground conveyor, and maintenance dredging to –11.5 m MLLW.
- Because Harbour Centre lacked a PPA operating permit, La Filipina et al. obtained their own permit for the apron; parties executed a zero‐rent Lease Agreement and, in November 2004, a detailed Memorandum of Agreement (“MOA”) covering berthing, handling charges, and dredging.
- In 2008 Harbour Centre demanded PHP 362 million in alleged unpaid rent and fees, and increased port and cargo handling charges without observing the MOA’s formula; La Filipina et al. refused and were ordered to remove their structures.
Contractual Agreements and Memorandum of Agreement (MOA)
- Lease Agreement (1999): no collection of rent for land and apron occupied by La Filipina et al.
- MOA (Nov 2004) key provisions:
• Section 2: staged increase of foreign vessel handling rate by ₱50/MT (to ₱89.12), thereafter new rates based on PPA stevedoring formula with 15-day written notice.
• Section 3: coastwise vessels free if loading foreign‐unloaded cargo; otherwise PPA domestic rates.
• Section 4: priority berthing rights for foreign and domestic vessels upon specified written notices and immediate vacating by third‐party vessels; breach entailed actual damages (e.g., demurrage).
• Section 6: maintenance dredging to –11.5 m MLLW; if depth falls to –11.2 m, Harbour Centre must begin dredging within 7 days or pay US$2,000/day; similar penalty if no dredging contract within 60 days or failure to complete within 45 days.
Initial Dispute and Pleadings
- September 2008: La Filipina et al. alleged refusal of priority berthing for 20 barges despite verbal and written notices; several vessels touched bottom due to insufficient dredging.
- September 8 2008: Complaint filed for maritime law compliance, breach of contract, specific performance, damages, and injunctive relief against Harbour Centre and PPA; 72-hour TRO issued, later extended to 20 days.
- Amended Complaint added claims for actual damages (barge delays, vessel surveys, diversion of M/V Sanko Jupiter), excess charges refund, and liquidated damages for missed dredging.
Regional Trial Court Proceedings
- February 1 2010: RTC Branch 24 admitted Amended Complaint.
- October 11 2011 Decision: RTC ordered Harbour Centre to:
• Dredge berthing area and channe