Case Summary (G.R. No. 80849)
Threshold Rationale: Prohibition on Second Motions for Reconsideration
- The resolution reiterates the longstanding rule against second motions for reconsideration: a second such motion is categorically disallowed unless the Court en banc, by at least two-thirds vote of its actual membership, finds the higher interest of justice. The requirements for admission are conjunctive: (1) demonstrable higher interest of justice; (2) motion filed prior to finality of the challenged ruling; (3) in Division cases, at least three Division members must vote to elevate to the en banc; and (4) two-thirds en banc concurrence to grant relief.
Denial of Motion for Leave: No Extraordinary Reasons Presented
- BCDA and Casanova’s second motion for reconsideration was denied for lack of extraordinarily persuasive reasons in the higher interest of justice. The second motion merely rehashed arguments previously raised and rejected by the Court in its August 13, 2014 Decision and March 18, 2015 Resolution, and failed to present new grounds warranting reconsideration or en banc elevation.
Existence and Effect of the Certification of Successful Negotiation
- The Court found that a perfected agreement existed between SMLI and BCDA, embodied in the Certification of Successful Negotiations, which created enforceable rights and obligations, including the duty to proceed with and complete the competitive challenge under Annex C of the NEDA JV Guidelines and the TOR. The Certification expressly stated that the parties had reached agreement on terms that "shall become the terms for the Competitive Challenge" and that SMLI’s original proposal would be subjected to competitive challenge immediately following TOR Volumes 1 and 2.
BCDA’s Cancellation of the Competitive Challenge: Gravely Abused Discretion
- On the merits, the Court concluded that BCDA gravely abused its discretion when it cancelled the competitive challenge before completion, thus acting arbitrarily and contrary to its contractual commitments and the NEDA JV Guidelines. The Court found BCDA failed to establish justifiable reasons for its refusal to proceed.
Interpretation of the TOR Qualifications Clause
- Respondents’ reliance on the TOR’s “Qualifications and Waivers” provision (which reserves BCDA the right to, among other things, reject eligibility documents, disqualify PSEs for misrepresentations, or call off the disposition prior to acceptance of proposals) was rejected. The Court interpreted the TOR as regulating the eligibility and participation of challengers, not as an unfettered grant allowing BCDA to cancel the entire Swiss Challenge in contravention of the NEDA JV Guidelines, which have the force and effect of law.
Estoppel Against the Government: Limited but Applicable Here
- While estoppel against the government is disfavored and subject to narrow exceptions, the Court held that equitable estoppel may be invoked where government conduct is dishonorable or capricious and where interests of justice require it. BCDA’s repeated assurances to SMLI, followed by cancellation after SMLI expended time and resources, and BCDA’s conflicting statements about the supposed advantage to government, supported application of estoppel in the circumstances.
Alleged Government Losses and Speculativeness of Economic Harm
- BCDA argued that proceeding with a challenge at SMLI’s indicated floor price (P38,500/sq.m.) would be grossly disadvantageous given alleged appraisals at higher values. The Court found the claimed economic injury speculative: the ruling ordered only that SMLI’s proposal be subjected to competitive challenge, not that the project be awarded to SMLI, and the floor price remained merely a floor without any competed bids yet to determine final price.
Finality of Judgment and Lack of Jurisdiction to Modify
- The Court noted that its August 13, 2014 Decision had become final and executory (with an Entry of Judgment issued), and therefore the Court no longer had jurisdiction to modify the decision. The principle of finality of judgments forecloses successive attempts to unsettle concluded adjudications except in narrow circumstances (clerical error, nunc pro tunc entries, or void judgments).
En Banc Jurisdiction Claim and the Ykalina Doctrine
- Respondents urged en banc hearing under Article VIII §4(2) alleging the cancellation traced to a presidential instruction. The Court rejected application of the Ykalina doctrine (which historically allowed certain verbal presidential appointments) because modern jurisprudence requires written appointment papers; Ykalina’s limited holding pertains to appointments and those evidenced by attestation from the Executive Secretary. No presidential order or attestation was shown here; Supplemental Notice No. 5 was not proved to be a presidential issuance falling within en banc jurisdiction.
Intervention by DND and AFP Denied: Interest Deemed Inchoate
- DND and AFP sought to intervene, asserting statutory beneficiary status for proceeds from BCDA property dispositions (to fund AFP modernization). The Court denied intervention: intervention requires a direct, immediate, and concrete legal interest that will be gained or lost by operation of the judgment. The DND/AFP interest was characterized as inchoate and contingent (dependent on successful bidding and realization of proceeds), not sufficiently direct to justify intervention; moreover, their comment-in-intervention raised no new issues.
Rule of Law and Governmental Accountability Emphasized
- The Court framed its ruling as reinforcing predictability and adherence to government rules: the government must honor commitments and cannot invoke amorphous public-interest claims to renege on contractual and legal obligations, lest it undermine rule of law and public trust in public-private partnerships. The decision underscored that the NEDA JV Guidelines contain safeguards and remedies to protect government interests in the competitive challenge process.
Disposition by Majority
- Motion for leave to file second motion for reconsideration (with motion to elevate to en banc) was DENIED for lack of merit. Motion for leave to file comment-in-intervention by DND and AFP was likewise DENIED. The Court ordered that no further pleadings, motions, letters, or communications be entertained in the case.
Dissent (Justice Leonen) — Procedural and Substantive Objections
- Justice Leonen dissented, arguing: (1) the Entry of Judgment was premature and deprived BCDA of its 15-day period to file a second motion for reconsideration after notice, rendering the denial procedurally infirm; (2) given the significant financial, governance, and national security stakes (including potential billions in proceeds for AFP modernization), the matter merited en banc consideration under the Court’s internal rules for cases with huge financial or community welfare impact; and (3) at minimum, SMLI should have been given opportunity to file a comment before summary denial.
Dissent — Factual Concerns and Perception of Irregularities
- The dissent details alleged governance and commercial irregularities leading to SMLI’s designation as original proponent: competing proposals from Robinsons and SMLI with timing and procedural anomalies (e.g., simultaneous resubmission process on May 4, 2010), the sudden withdrawal of Robinsons, rapid evaluation and recommendation within hours, allegations of preferential treatment, and Ayala Land’s superior offer being effectively ignored. Board minutes reflected concerns about rushing decisions ahead of a new administration and about alignment with presidential policy.
Dissent — Presidential Policy Review and Executive Authority
- Leonen emphasizes the President’s supervisory role to ensure faithful execution of laws and that the incoming admi
Case Syllabus (G.R. No. 80849)
Background and Parties
- Petitioner: SM Land, Inc. (SMLI), original proponent of an unsolicited proposal to develop BCDA-administered Bonifacio South property (33.1 hectares in Fort Bonifacio).
- Respondents / Movants: Bases Conversion and Development Authority (BCDA) and Arnel Paciano D. Casanova, Esq., President and CEO of BCDA.
- Intervenors (movants for intervention): Department of National Defense (DND) and the Armed Forces of the Philippines (AFP), claiming status as statutory beneficiaries of proceeds from BCDA property dispositions to fund the AFP Modernization Program pursuant to RA 7227 as amended by RA 10349.
- Subject matter: Challenge to BCDA’s issuance of Supplemental Notice No. 5 (August 6, 2012), which terminated the competitive challenge process (Swiss Challenge) that would have subjected SMLI’s duly accepted unsolicited proposal to comparative proposals; SMLI sought relief via certiorari and related remedies to compel completion of the competitive challenge.
Procedural Posture and Motions at Issue
- August 13, 2014 Decision (Third Division): granted SMLI’s petition for certiorari and directed BCDA to subject SMLI’s duly accepted unsolicited proposal to a competitive challenge.
- BCDA filed a Motion for Reconsideration which was denied in a March 18, 2015 Resolution.
- BCDA and Casanova later filed a Motion for Leave to file a Second Motion for Reconsideration and to admit the attached Second Motion for Reconsideration, with a motion to have the Court en banc take cognizance and/or set the case for oral argument before the Court en banc.
- DND and AFP filed a Joint Motion for Leave to File Comment-in-Intervention and attached Comment-in-Intervention, asserting their entitlement as statutory beneficiaries that proceeds would fund AFP modernization.
- The case reached the Supreme Court’s Special Third Division, which resolved the motions by Resolution dated September 7, 2015 (per Velasco, Jr., J.), denying both the Motion for Leave to file Second Motion for Reconsideration and the Motion for Leave to File Comment-in-Intervention.
Issues Presented in the Second Motion for Reconsideration
- BCDA’s enumerated grounds for the second motion (as captioned in the filing):
- I. Alleged lack of perfected agreement / meeting of the minds between SMLI and BCDA such that BCDA could be compelled to complete the competitive challenge.
- II. The government’s reservation to cancel the competitive challenge constitutes a policy decision and remains elective and binding upon private sector entities.
- III. The decision to terminate the competitive challenge is a policy and economic decision not amenable to mandamus.
- IV. Estoppel cannot operate to prejudice the government.
- V. The perceived government losses are real and not imagined.
- BCDA sought admission of this second motion and elevation to the Court en banc.
Governing Rule on Second Motions for Reconsideration and En Banc Elevation
- The Supreme Court relied on procedural rules precluding second motions for reconsideration:
- Section 2, Rule 56 (and related Rules 46, 48, 49, 51, 52) and Sec. 2, Rule 52 of the Rules of Court: "no second motion for reconsideration of a judgment or final resolution by the same party shall be entertained."
- Section 3, Rule 15 of the Internal Rules of the Supreme Court (A.M. No. 10-4-20-SC): second motion for reconsideration not entertained except by leave of the Court en banc in the higher interest of justice and only upon a vote of at least two-thirds of the Court’s actual membership; in the Division, a vote of three Members is required to elevate the motion en banc.
- The Court summarized the required elements to entertain a second motion for reconsideration:
- (1) A satisfactory explanation why granting the motion would be in the higher interest of justice;
- (2) The motion must be made before the ruling sought to be reconsidered attains finality;
- (3) If rendered by a Division, at least three members of that Division must vote to elevate the matter en banc;
- (4) At least two-thirds of the Court en banc must vote to grant the second motion.
Court’s Application of the Rule and Denial of Leave
- The Special Third Division found the instant filing to be a prohibited second motion for reconsideration and denied leave to file because:
- The motion was largely a rehash of prior arguments already addressed in the August 13, 2014 Decision and March 18, 2015 Resolution and did not present extraordinarily persuasive reasons in the higher interest of justice.
- The requirements for en banc elevation were not met: lack of extraordinary reasons, the ruling had attained finality with an Entry of Judgment, and Division did not find grounds to elevate the matter to the Court en banc.
- The Second Motion for Reconsideration was therefore denied for lack of merit.
Contractual Findings — Certification of Successful Negotiations and Rights of Original Proponent
- The Court reiterated its finding that there existed a perfected agreement between SMLI and BCDA encapsulated in the Certification of Successful Negotiations after Stage II of Annex C (NEDA JV Guidelines):
- The Certification expressly states that BCDA and SMLI reached agreement on the purpose, terms and conditions of the JV development which "shall become the terms for the Competitive Challenge pursuant to Annex C of the Guidelines."
- The Certification further stated that SMLI’s Original Proposal would be subject to Competitive Challenge pursuant to Annex C, "which competitive challenge process shall be immediately implemented following the Terms of Reference (TOR) Volumes 1 and 2."
- Under the agreement and the NEDA Joint Venture Guidelines (which the Court treated as having force and effect of law), BCDA had a duty to proceed with and complete the competitive challenge after successful detailed negotiations; cancellation before completion was held to constitute grave abuse of discretion and arbitrary action to the prejudice of SMLI.
- The Certification and related documents were read by the Court as creating certain rights and obligations, including commencement and completion of the competitive challenge process for SMLI’s proposal.
Interpretation of the Terms of Reference (TOR) — Qualifications and Waivers Clause
- BCDA argued the TOR’s Qualifications and Waivers (Section VIII) permitted cancellation of the Swiss Challenge at any time, but the Court rejected that interpretation:
- The TOR’s Qualifications and Waivers focus on eligibility requirements for Private Sector Entities (PSEs) who wish to challenge the original proposal, not a blanket authority to cancel the Swiss Challenge in its entirety.
- The Court held that interpreting the TOR as allowing BCDA to cancel the competitive challenge at any time would contravene the NEDA JV Guidelines.
- The TOR provision cited by BCDA (VIII.1–3) reserves certain rights (e.g., to reject Eligibility Documents; to review other information and disqualify PSEs for misrepresentation; and to call off the disposition prior to acceptance of proposals and call for a new process without liability except for returning Proposal Security), but the Court concluded such reservations do not justify unilateral cancellation contrary to the NEDA JV Guidelines and the agreement made with the original proponent.
Estoppel and Government Conduct
- BCDA invoked the doctrine that the State cannot be estopped by acts or mistakes of its officials; the Court addressed the doctrine and its exceptions:
- The Court acknowledged the general principle that estoppel against the public is disfavored and should be invoked only in rare and unusual circumstances, where justice so requires.
- However, the Court also recognized that the government "must not be allowed to deal dishonorably or capriciously with its citizens," and that equitable estoppel may be invoked against public authorities subject to limitations.
- The Court found BCDA had made repeated assurances to SMLI and, after causing SMLI to expend considerable trouble and expense, BCDA reneged and cancelled the agreement — conduct the Court characterized as capricious and damaging to SMLI.
- Conflicting BCDA statements about whether SMLI’s proposal was advantageous to government further supported the Court’s view of capriciousness.
Alleged Economic Loss and Floor Price Argument
- BCDA contended that proceeding with the competitive challenge at SMLI’s proposed floor price (P38,500/sq.m.) was patently unjust and would cause substantial loss because other appraisals valued the property significantly higher (allegedly P78,000/sq.m. or more).
- The Court deemed the alleged adverse economic impact as speculative:
- The Court clarified it did not award the project to SMLI but ordered that SMLI’s proposal be subjected to a competitive challenge.
- The SMLI floor price is only a floor price; until comparative proposals are solicited and final bids obtained, no determination can be made whether final bid price would be below fair market value.
- The Court found BCD