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RepublicofthePhilippines
SUPREMECOURT
Manila

FIRSTDIVISION

G.R.No.200402June18,2014

PRIVATIZATIONandMANAGEMENTOFFICE,Petitioner,
vs.
STRATEGIC ALLIANCE DEVELOPMENT CORPORATION and/or PHILIPPINE ESTATE CORPORATION,
Respondents.

xx

G.R.No.208127

STRATEGIC ALLIANCE DEVELOPMENT CORPORATION as substituted by PHILIPPINE ESTATE

CORPORATION,Petitioner,
vs.
PRIVATIZATION AND MANAGEMENT OFFICE (formerly Asset Privatization Trust), and PHILIPPINE
NATIONALCONSTRUCTIONCORPORATION,Respondents.

RESOLUTION

SERENO,CJ:

These consolidated cases began with the Petition for Review on Certiorari dated 16 March 2012 filed by the
Privatization and Management Office (PMO) before this Court.1 The petition assailed the Court of Appeals (CA)
Decision dated 27 January 2012.2 Therein, the CA had affirmed the Decision of the Regional Trial Court (RTC)3
awarding to Strategic Alliance Development Corporation (the predecessor of Philippine Estate Corporation or
"PHES"4), the auctioned Philippine National Construction Corporation shares, receivables, and securities (PNCC
properties)ownedbythePhilippinegovernment.Thispetition,docketedasG.R.No.200402,wasraffledtotheFirst
DivisionoftheCourt.

The Court required respondents in said case, Strategic Alliance Development Corporation and/or PHES, to file a
Comment on the petition.5 Strategic Alliance Development Corporation complied, while PHES failed to do so.
Subsequently,on31January2013,theformermovedfortheearlyresolution6ofG.R.No.200402.

Before the Court could act upon these incidents, the CA vacated its Decision dated 27 January 2012, which, as
mentioned, was the subject of G.R. No. 200402. In the Amended Decision dated 13 February 2013 and its
concomitantResolutiondated12July2013,7theoriginalDecisionoftheappellatecourtinfavorofStrategicAlliance
DevelopmentCorporationwascompletelyreversedinfavorofPMO.

NoneofthepartiestimelyinformedtheCourtofthisdevelopment.Thus,itsFirstDivisionproceededtoresolveG.R.
No.200402,withtheMotionforEarlyResolutionofthecasebeingthelastpleadingfiledbytheparties.

On13June2013,theCourt,throughtheFirstDivision,issuedaDecisionresolvingG.R.No.200402.Wegranted
theRule45petitionfiledbyPMOandreversedtheCADecisiondated27January2012forunjustifiablycompelling
PMOtoawardthePNCCpropertiestoStrategicAllianceDevelopmentCorporation.8

Aggrieved,StrategicAllianceDevelopmentCorporationfiledaMotionforReconsiderationon17July2013.9Thisis
theremainingincidentbeforetheCourtinG.R.No.200402.

Thirteendaysthereafter,oron30July2013,theSecondDivisionoftheCourtcametoknowoftheamendedrulings
oftheCAthroughthefilingbyPHESofitsPetitionforReviewonevendate.10ThisRule45petitionwasraffledto
theSecondDivisionoftheCourtandcontainedinitsannexestheAmendedDecisiondated13February2013and
theResolutiondated12July2013oftheCA.ThispetitionisthematterforconsiderationunderG.R.No.208127.
On 11 November 2013, the Second Division of the Court resolved to consolidate G.R. No. 208127 with G.R. No.
200402,11 the latter being the lower docket number.12 Thus, remaining at bench in the First Division are (1) the
MotionforReconsiderationfiledbyStrategicAllianceDevelopmentCorporationand(2)thePetitionforReviewfiled
byPHES.AsPHEShasalreadysubstitutedforStrategicAllianceDevelopmentCorporationinG.R.No.208127,the
Courtappreciatestheformeraspetitionerintheseconsolidatedcases.

THEFACTS

Theseconsolidatedcasesstemfromacommonsetofundisputedfacts.

Brieflystated,PMO,thenoperatingastheAssetPrivatizationTrust(APT),heldapublicbiddingon30October2000
tosellthePNCCpropertiesinordertogeneratemaximumcashrecoveryforthegovernment.TheAssetSpecific
Bidding Rules (ASBR) governed the bidding process, which had the following pertinent rules:13 (1) the indicative
priceofthePNCCpropertiesshallbeannouncedonthedayofthebidding(2)thewinningbidderistheonethat
submitsthehighesttotalbidandthatcomplieswithallthetermsoftheASBR(3)PMOreservestherighttoreject
anyorallbids,includingthehighestbidand(4)thedeliveryoffinancialinformationregardingthePNCCproperties
shall not give rise to a warranty with respect to the said data or information. Strategic Alliance Development
Corporation,asaparticipantinthebiddingprocess,14signifieditsacceptanceundertheseterms.

On the day of the bidding, the indicative price was announced at P7,000,000,000. None of the bidders met the
threshold. StrategicAllianceDevelopmentCorporation,despitegivingthehighestoffer,onlygaveP1,228,888,800
1wphi1

asitsbidoffer.Consequently,PMOrejectedallthebids.

Asaresult,StrategicAllianceDevelopmentCorporationprotestedtherejectionofitsbidandinsistedthatanoticeof
award15ofthePNCCpropertiesbeissuedinitsfavor.PMOrefused.Subsequently,theformerfiledaComplaintfor
DeclarationofRighttoaNoticeofAwardand/orDamagesbeforetheRTC.16Rulinginthebiddersfavor,thetrial
court held that the failure to explain the basis of the indicative price of P7 billion constituted a grave abuse of
discretion and a violation of the publics right to information, warranting the issuance of a notice of award of the
PNCCpropertiestoStrategicAllianceDevelopmentCorporation.

On appeal, the CA affirmed the ruling of the RTC in its Decision dated 27 January 2012. PMO questioned the
aforesaidrulingbeforethisCourtviaaPetitionforReviewonCertioraridated16March2012.Meanwhile,PMOs
copetitioner,PNCC,movedforreconsideration.

In resolving the Motion for Reconsideration filed by PNCC, the CA totally reversed itself in its Amended Decision
dated 13 February 2013 and Resolution dated 12 July 2013. The CA held that PMO and PNCC cannot be
compelledtoacceptthebiddersmeageroffer,whichwasgrosslydisadvantageoustotheFilipinopeople.TheCA
alsoconsideredthatPMOhadtherightundertheASBRtorejectanyorallbidsandthatitsexerciseofdiscretionto
rejectthebidofStrategicAllianceDevelopmentCorporationhadnotbeenattendedbyunfairness,arbitrarinessor
graveabuse.

Unfortunately, these later rulings were never timely brought to the attention of the Court. Hence, prior to the
1wphi1

issuanceoftheserulingsbytheCA,thisCourthadalreadyadjudicatedtheRule45petitionearlierfiledbythePMO
inourDecisiondated13June2013.InourDecision,weruledagainsttheproprietyofcompellingPMOtoawardthe
PNCCpropertiestoStrategicAllianceDevelopmentCorporation.

In particular, we held that, regardless of the alleged violation of the publics right to information as regards the
valuation of the indicative price, the PNCC properties could not be automatically awarded to a losing bidder. In
effect,wereversedtheRTCDecisiondated1July2010andtheCADecisiondated27January2012.

THEISSUES

ThepresentissuesbeforethisCourtintheMotionforReconsiderationinG.R.No.200402andinthePetitionfor
ReviewinG.R.No.208127areidentical.Wenotethattheseissuesalsorehashthepreviouspleadingssubmitted
bytheparties.

Firstly,PHESrepeatstheargumentthattheannouncementoftheindicativepriceafterthesubmissionofthesealed
bidsconstitutedanactoffraudonthepartofPMO.Secondly,PHESreiteratesthatthevaluationoftheindicative
pricewaserroneous,andthatthepublicsrighttoinformationwasviolatedbythefailureofPMOtoexplainthehigh
indicative price. For PHES, these reasons warrant the issuance of a notice of award of the PNCC properties to
StrategicAllianceDevelopmentCorporation.

THERULINGOFTHECOURT

WedenytheentreatyofPHES.ItfailstoraisesubstantialargumentswarrantingustomaintainourDecisiondated
13 June 2013, and to affirm the Amended Decision of the CA dated 13 February 2013, and its concomitant
Resolutiondated12July2013.
AccordingtoPHES,thelateannouncementoftheindicativepriceamountedtofraud.ButPMOtimelyannounced
the indicative price on the day of the bidding pursuant to the ASBR.17 Therefore, absent a clear and convincing
evidenceoffraud,andgiventhatPMOfollowedtheprotocol,fraudonitspartcannotbepresumed.18

To justify the acceptance of its bid for the PNCC properties, PHES reiterates that PMO erred in computing and
explainingtheindicativepriceof7billion,inviolationofthepublicsrighttodueprocess.However,itsallegationsare
irrelevantconsideringthattheCivilCode19andtheASBR20pertinentlyprovidethatbidsaremereoffers,whichmay
berightfullyrejectedbyPMO.Moreover,PHESunsuccessfullyanchorsitsclaimonaviolationofthepublicsrightto
informationbecausethesaidrightmerelygivesaccesstopublicrecords,anddoesnotprecipitateapositiverightto
obtainanawardofthePNCCproperties.21

Other issues have also been raised in these consolidated cases. These include the arguments that a notice of
awardisnottantamounttoasale,andthattheDecisionofthisCourtdated13June2013isalreadymoot,giventhat
theCAthroughitsamendedrulingshasalreadyabandoneditsoriginalDecisiondated27January2012.

The first new issue presents no substantial argument, considering that the issuance of a notice of award, as
admittedbyPHESitself,22 is the initial step towards the perfection of the contract of sale involving the auctioned
PNCCproperties.Thesecondnewissueislikewiseflawed.ConsideringthattheamendedrulingsoftheCAarethe
subjectsoftheinstantappealinG.R.No.208127,itsAmendedDecisiondated13February2012andResolution
dated12July2013cannotbeconsideredasfinalandexecutoryrulingsthatwilleffectivelyvacateitsDecisiondated
27January2012.23

Therefore, we reiterate the denial of the prayer for the issuance of a notice of award to Strategic Alliance
DevelopmentCorporation.

INVIEWTHEREOF,theMotionforReconsiderationdated17July2013inG.R.No.200402andPetitionforReview
dated30July2013inG.R.No.208127areherebyDENIEDforlackofmerit.

SOORDERED.

MARIALOURDESP.A.SERENO
ChiefJustice,Chairperson

WECONCUR:

TERESITAJ.LEONARDODECASTRO
AssociateJustice

LUCASP.BERSAMIN MARTINS.VILLARAMA,JR.
AssociateJustice AssociateJustice

BIENVENIDOL.REYES
AssociateJustice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the above Resolution had
beenreachedinconsultationbeforethecasewasassignedtothewriteroftheopinionoftheCourt'sDivision.

MARIALOURDESP.A.SERENO
ChiefJustice

Footnotes
1
Rollo(G.R.No.200402),pp.9116.
2
Id.at118148.TheCADecisioninCAG.R.CVNo.96368waspennedbyAssociateJusticeVicenteS.E.
Veloso,withAssociate.JusticesStephenC.CruzandAmyC.LazaroJavierconcurring.
3
Id at. 149170. The RTC Decision in Civil Case No. 05882was penned by Presiding Judge Zenaida T.
GalapateLaguilles.
4
Rollo(G.R.No.208127),p.276.AsdeclaredbytheRTCinitsOrderdated13September2010,PHESis
declaredasthesubstitutepartyplaintiffinlieuofStrategicAllianceDevelopmentCorporation.
5
Rollo(G.R.No.200402),pp.573574Resolutiondated23April2012.
 6
Id.at680684.
7
Rollo (G.R. No. 208127), pp. 3442, 7587 The Amended Decision and Resolution of the CA were also
penned under CAG.R. CV No. 96368 by Associate Justice Vicente S.E. Veloso, with Associate Justices
StephenC.CruzandAmyC.LazaroJavierconcurring.
8
Rollo(G.R.No.200402),p.697.
9
Id.at703727.
10
Rollo(G.R.No.208127),pp.332.
11
Rollo(G.R.No.208127),pp.514519rollo(G.R.No.200402),pp.761766.
12
TheInternalRulesoftheSupremeCourt,A.M.No.10420SC,Rule9,Section5.
13
Rollo(G.R.No.200402),pp.199220.
14
Id. at 419 Strategic Alliance Development Corporation was one of the entities that formed DongA
Consortium,whichwasthebidderofthePNCCproperties.
15
Id. at 416. A notice of award is issued to a winning bidder, who must satisfy and comply with all the
requirementsoftheASBR.aswellastheIndicativePrice.
16
Id.at263275filedon3October2005.
17
Id.at200Section3.1oftheASBRprovidesthattheIndicativePricefortheShares,Receivablesandthe
Securitiesshallbeannouncedonthedayofthebidding.
18
Rementizov.Vda.deMadarieta,G.R.No.170318,15January2009,576SCRA109.
19
Art. 1326 of the Civil Code provides that advertisements for bidders are simply invitations to make
proposals, and the advertiser is not bound to accept the highest or lowest bidder, unless the contrary
appears.
20
Rollo(G.R.No.200402),p.200Section4.3oftheASBRprovidesthatAPTreservestherighttorejectany
orallbids,includingthehighestbid,ortowaiveanydefectorrequiredformalitytherein.
21
CONSTITUTION,Art.III,Sec.7readsasfollows:Therightofthepeopletoinformationonmattersofpublic
concern shall be recognized. Access to official records, and to documents and papers pertaining to official
acts, transactions, or decisions, as well as to government research data used as basis for policy
development,shallbeaffordedthecitizen,subjecttosuchlimitationsasmaybeprovidedbylaw.
22
Rollo(G.R.No.200402),p.723rollo(G.R.No.208127),p.26.
23
SeeIpapov.CourtofAppeals,G.R.No.L49793,20August1981,193Phil.791(1981).

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