Hutchison Ports Philippines Limited (HPPL) v Subic Bay Metropolitan Authority

Facts

Petition to suspend or hold in abeyance the conduct of SBMA of a rebidding. SBMA advertised an invitation offering to the private sector the opportunity to develop and operate a modern

marine container terminal within Subic Bay Freeport Zone. Out of 7 bidders, 3 were declared as qualified: 1) ICTSI 2) RPSI and 3) HPPL SBMA-PBAC first awarded to HPPL. However, ICTSI filed an appeal with SBMA and also before the Office of the

President. In a memorandum, the President ordered SBMA Chairman Gordon to revaluate the financial bids together with

the COA. Again, the SBMA Board issued another reso declaring that HPPL is selected as winner, since it has a realistic

business plan offering the greatest financial return to SBMA and the most advantageous to the government. Nothwithstanding the SBMA’s board recommendations, then Exec Sec Reuben Torres submitted a memorandum

to the Office of President recommending another rebidding. Consequently, the Office of Pres. Issued a memorandum to conduct a rebidding.

On July 7, 1997, HPPL filed a complaint against SBMA before the RTC and alleged that a binding and legally enforeceable contract had been established between HPPL and SBMA under Article 1305 of the civil code, considering that SBMA had repeatedly declared and confirmed that HPPL was the winning bidder.

During the pre-trial hearing, one of the issues raised and submitted for reso was whether or not the Office of the President can set aside the award made by SBMA in favor of HPPL and if so, can the Office of the President direct the SBMA to conduct re-bidding of the proposed project.

Issue: Can the President set aside the award made by SBMA in favor of HPPL? If so, can the Office of the President direct SBMA to conduct rebidding of the proposed project?

Held:

Yes HPPL has not sufficiently shown that it a has a clear and unmistakable right to be declared the winning bidder.

Though SBMA Board of Directors may have declared them as winner, said award is not final and unassailable. The SBMA Board of Directors are subject to the control and supervision of the President. All projects undertaken

by SBMA require the approval of the President under Letters of Instruction No. 620 Letters of Instruction No. 620 mandates that the approval of the President is required in all contracts of the

national government offices, agencies and instrumentalities including GOCCS involving P2M and above, awarded through public bidding or negotiation.

The President may, within his authority, overturn or reverse any award made by the SBMA Board of Directors for justifiable reasons.

When the President issued the memorandum setting a side the award previously declared by SBMA in favor of HPPL, the same was within authority of the President and was a valid exercise of his prerogative.

The petition is dismissed for lack of merit.