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SM LAND v. BASES CONVERSION

FACTS:

The Bases Conversion Development Authority (BCDA) and Arnel Paciano D. Casanova filed a Motion for Leave to file Second Motion for Reconsideration and to Admit the Attached Second Motion for Reconsideration, urging the Court to reconsider its August 13, 2014 Decision. They claim that the ruling would cause unwarranted harm to the government, particularly the Department of National Defense (DND) and the Armed Forces of the Philippines (AFP).

The Court notes that the motion is a second motion for reconsideration, which is prohibited under the Rules of Court. The prohibition on second motions for reconsideration is to prevent parties from indefinitely delaying the finality of a judgment. The Court explains that all cases must eventually reach a binding conclusion and not remain indefinitely in limbo. Thus, the Court only allows second motions for reconsideration that are grounded on extraordinarily persuasive reasons and with express leave from the Court. However, the Court finds that the second motion for reconsideration in this case fails to meet these requirements as it merely reiterates previous arguments that have already been addressed by the Court in previous decisions.

The case involves an agreement between Subic Integrated Landholdings, Inc. (SMLI) and the BCDA for the joint development of a property. The agreement was embodied in the Certification of Successful Negotiations, which stated that BCDA and SMLI had reached an agreement on the purpose, terms, and conditions of the development. According to the agreement and the National Economic Development Authority Joint Venture Guidelines (NEDA JV Guidelines), BCDA was obligated to proceed with and complete the competitive challenge after successful negotiations. However, BCDA cancelled the competitive challenge before its completion.

SMLI argued that BCDA's cancellation was a grave abuse of discretion and contrary to its contractual commitment. BCDA argued that it had the power to cancel the competitive challenge based on the Terms of Reference provision on Qualifications and Waivers. The court ruled that BCDA's cancellation was arbitrary and contrary to its contractual commitment. The court explained that BCDA's reliance on the Terms of Reference provision was misplaced as it only pertained to the eligibility requirements for Private Sector Entities (PSEs) and not the competitive challenge as a whole.

The court also rejected BCDA's argument that the doctrine of estoppel does not apply to the government, stating that the doctrine can be invoked against public authorities. BCDA's cancellation of the agreement after assuring SMLI of its rights as the original proponent showed capriciousness. BCDA's conflicting statements on the advantage of SMLI's proposal further demonstrated its arbitrary behavior. The court also dismissed BCDA's argument that proceeding with the competitive challenge at a low floor price would be disadvantageous to the government, stating that the economic impact remains speculative until the proposal is subjected to a competitive challenge. Overall, the court found that BCDA failed to provide a justifiable reason for cancelling the competitive challenge.

ISSUES:

  1. Whether the cancellation of the competitive challenge by the BCDA violated the agreement and NEDA JV Guidelines.

  2. Whether the Court has jurisdiction to modify its decision and admit the second motion for reconsideration.

  3. Whether the Ykalina doctrine can be applied in the present case.

  4. Whether the Department of National Defense (DND) and Armed Forces of the Philippines (AFP) have sufficient legal interest to intervene in the case.

  5. Whether or not the respondent-movants should be held accountable for the representations they made during the negotiation process.

  6. Whether or not the government is entitled to safeguards and remedies after soliciting comparative proposals.

RULING:

  1. The cancellation of the competitive challenge by the BCDA violated the agreement and NEDA JV Guidelines. The BCDA failed to establish a justifiable reason for its refusal to proceed with the competitive challenge, and it appears that the cancellation was only due to BCDA's whims and caprices. Therefore, the cancellation can be corrected through the extraordinary writ of certiorari.

  2. The second motion for reconsideration is totally bereft of merit, and there exists no argument "in the higher interest of justice" that would convincingly compel the Court to even admit the prohibited pleading. The Court's ruling in the case has already attained finality and an Entry of Judgment has been issued, rendering the decision immutable and unalterable. The only exceptions to the rule on the immutability of final judgments are the correction of clerical errors, nunc pro tunc entries which cause no prejudice to any party, and void judgments. Therefore, the Court does not have jurisdiction to modify its decision and admit the second motion for reconsideration.

  3. The Ykalina doctrine does not apply in this case. The doctrine only applies to verbally given appointments by the President that are attested to by the Executive Secretary. However, in this case, there is no evidence of a presidential order or instruction attested to by the Executive Secretary. Therefore, the Ykalina doctrine cannot divest the Court's division of jurisdiction over the case.

  4. The DND and AFP do not have sufficient legal interest to intervene in the case. Intervention is not an absolute right but is subject to the possession of a legal interest that is direct, immediate, actual, and material. In this case, the DND and AFP claim to be beneficiaries of the proceeds from the project, but their right to the proceeds is contingent upon the success of the bidding process. As such, their right is inchoate and does not constitute sufficient legal interest to intervene in the case. Additionally, their comment in intervention does not raise any new issues that have not already been resolved by the Court's previous decision and resolution.

  5. The respondent-movants are held accountable for the representations they made during the negotiation process and the delays and postponements encountered. The Court aims to concretize the government's adherence to statutory enactments, fulfillment of commitments, and covenants made. Thus, the petition is denied.

  6. The government is entitled to safeguards and remedies after soliciting comparative proposals as provided under the TOR and the NEDA JV Guidelines. There are sufficient safeguards installed to prevent the government from incurring "unwarranted, irreparable injury." The respondent-movants should have devoted sufficient time in reviewing these guidelines to dispel any apprehension and fear.

PRINCIPLES:

  • The cancellation of a competitive challenge without justifiable reason violates the agreement and guidelines in place.

  • The principle of the conclusiveness of prior adjudications holds that final judgments should reach a point of finality set by the law, and exceptions to the rule include the correction of clerical errors, nunc pro tunc entries, and void judgments.

  • The issuance of a presidential order may be in the form of a written memorandum or a verbal instruction, but contemporary jurisprudence no longer recognizes the validity of oral appointments.

  • The Ykalina doctrine only applies to verbally given appointments by the President that are attested to by the Executive Secretary.

  • Intervention is not an absolute right but is subject to the possession of a direct, immediate, actual, and material legal interest.

  • The Court's exercise of discretion in granting intervention is limited by considering whether intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether the intervenor's rights may be fully protected in a separate proceeding.

  • The Rule of Law requires predictability and adherence to government regulations and contractual and legal obligations.

  • Strengthening the Rule of Law requires the government's strict adherence to statutory enactments, fulfillment of commitments, and covenants made.

  • The government is entitled to safeguards and remedies after soliciting comparative proposals.

  • Reading and reviewing guidelines thoroughly can dispel apprehension and fear.