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BUS ORG. BATCH 2 FULLTEXT CASES:

PARTNERSHIP DISTINGUISHED FROM OTHER BUSINESS MEDIA

G.R. No. 113375 May 5, 1!

"ILOSBA#AN, INCORPORATED, $O%ITO R. SALONGA, CIRILO A.

RIGOS, ERME CAMBA, EMILIO C. CAPULONG, $R., $OSE T. APOLO,

EPHRAIM TENDERO, FERNANDO SANTIAGO, $OSE ABCEDE,

CHRISTINE TAN, FELIPE L. GO&ON, RAFAEL G. FERNANDO, RAOUL %.

%ICTORINO, $OSE CUNANAN, 'UINTIN S. DOROMAL, SEN. FREDDIE

(EBB, SEN. (IGBERTO TA)ADA, a*+ REP. $O"ER P.ARRO#O, petitioners,

vs.

TEOFISTO GUINGONA, $R., * - /a0a/y a E/4 S/6a6y,

O/ o - P6+*8 RENATO CORONA, * - /a0a/y a

Aa* E/4 S/6a6y a*+ C-a69a* o - P6+*a

6; Co99 o* - Loo, O/ o - P6+*8 PHILIPPINE

CHARIT# S(EEPSTA"ES OFFICE8 a*+ PHILIPPINE GAMINGMANAGEMENT CORPORATION, respondents.

Jovito R. Salonga, Fernando Santiago, Emilio C. Capulong, Jr. and Felipe L.

Gozon for petitioners.

Renato L. Cayetano and Eleazar B. Reyes for PGC.

Gamaliel G. Bong!o, "s!ar #araan and Jedideo$ Sin!ero for intervenors.

DA%IDE, $R.,J.:This is a special civil action for prohibition and injunction, with a prayer for a

temporary restraining order and preliminary injunction, which seeks to

prohibit and restrain the implementation of the "Contract of Lease" executed

by the hilippine Charity !weepstakes ffice #C!$ and the hilippine

%aming &anagement Corporation #%&C$ in connection with the on' line

lottery system, also known as "lotto."

etitioner (ilosbayan, )ncorporated #()L!*++-$ avers that it is a non'stock domestic corporation composed of civic'spirited citiens, pastors,

priests, nuns, and lay leaders who are committed to the cause of truth,

justice, and national renewal. The rest of the petitioners, except !enators

/reddie 0ebb and 0igberto Ta1ada and 2epresentative 3oker . +rroyo, are

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suing in their capacities as members of the *oard of Trustees of

()L!*++- and as taxpayers and concerned citiens. !enators 0ebb and

Ta1ada and 2epresentative +rroyo are suing in their capacities as members

of Congress and as taxpayers and concerned citiens of the hilippines.

The pleadings of the parties disclose the factual antecedents which triggered

off the filing of this petition.

ursuant to !ection 4 of the charter of the C! #2.+. -o. 4456, as

amended by *.. *lg. 78$ which grants it the authority to hold and conduct

"charity sweepstakes races, lotteries and other similar activities," the C!

decided to establish an on' line lottery system for the purpose of increasing

its revenue base and diversifying its sources of funds. !ometime before

&arch 4669, after learning that the C! was interested in operating an on'

line lottery system, the *erjaya %roup *erhad, "a multinational company

and one of the ten largest public companies in &alaysia," long "engaged in,

among others, successful lottery operations in +sia, running both Lotto and

:igit games, thru its subsidiary, !ports Toto &alaysia," with its "affiliate, the

)nternational Totaliator !ystems, )nc., . . . an +merican public company

engaged in the international sale or provision of computer systems,softwares, terminals, training and other technical services to the gaming

industry," "became interested to offer its services and resources to C!."

+s an initial step, *erjaya %roup *erhad #through its individual nominees$

organied with some /ilipino investors in &arch 4669 a hilippine corporation

known as the hilippine %aming &anagement Corporation #%&C$, which

"was intended to be the medium through which the technical and

management services re;uired for the project would be offered anddelivered to C!." 1

*efore +ugust 4669, the C! formally issued a 2e;uest for roposal #2/$

for the Lease Contract of an on'line lottery system for the C!. 22elevant

provisions of the 2/ are the following$

years.

4.>. The Lessor is expected to submit a comprehensive

nationwide lottery development plan #":evelopment lan"$ which

will include the game, the marketing of the games, and the

logistics to introduce the games to all the cities and

municipalities of the country within five #>$ years.

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4.?. The Lessor shall be selected based on its technical

expertise, hardware and software capability, maintenance

support, and financial resources. The :evelopment lan shall

have a substantial bearing on the choice of the Lessor. The

Lessor shall be a domestic corporation, with at least sixty

percent #5@A$ of its shares owned by /ilipino shareholders.xxx xxx xxx

The ffice of the resident, the -ational :isaster Control

Coordinating Council, the hilippine -ational olice, and the

-ational *ureau of )nvestigation shall be authoried to use the

nationwide telecommunications system of the /acilities /ree of

Charge.

4.B. pon expiration of the lease, the /acilities shall be owned byC! without any additional consideration.3

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8.8. *3DCT)ED!

The objectives of C! in leasing the /acilities from a private

entity are as follows