GR 212686 VelaSCo (Digest)
G.R. No. 212686 , September 28, 2015
SERGIO R. OSMENA III, PETITIONER, VS. POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION, EMMANUEL R. LEDESMA, JR., SPC POWER CORPORATION AND THERMA POWER VISAYAS, INC., RESPONDENTS.
FACTS
The case involves the privatization of the Naga Power Plant Complex (NPPC) by the Power Sector Assets and Liabilities Management Corporation (PSALM). SPC Power Corporation (SPC) claimed a “right to top” the highest bid for the NPPC based on a clause in a separate Land-Based Gas Turbine-Land Lease Agreement (LBGT-LLA) it had with PSALM. This clause granted SPC the right to top the price of the winning bidder for the sale or lease of property in the vicinity of the leased premises. SPC exercised this right after Therma Power Visayas, Inc. (TPVI) was identified as the highest bidder for the NPPC, submitting an improved offer that was higher than TPVI’s bid.
ISSUE
Whether SPC’s “right to top” under the LBGT-LLA is valid and applicable to the privatization of the NPPC, thereby allowing SPC to match or exceed the highest bid.
RULING
No. The concurring opinion agrees with the ponencia’s ruling that SPC’s “right to top” is invalid. Jurisprudence generally invalidates such stipulations as they contravene the policy requiring government contracts to be awarded through public bidding. A narrow exception exists only if the beneficiary can prove a subsisting interest in the specific object of the bidding and the government stands to benefit. SPC failed to prove such an interest in the NPPC. Its right was derived from a lease agreement concerning a different power plant (the LBGT facility), which is distinct and separate from the NPPC project being bid out. Therefore, SPC’s improved offer, even if financially more advantageous to the government, is irrelevant and cannot be given effect. The opinion further clarifies the conceptual differences between a “right of first refusal” (right to be offered first), a “right to match” (right to offer the same amount as the highest bid), and a “right to top” (right to offer a higher amount than the highest bid), noting they are all generally invalid but operate at different stages of the bidding process. The petition is granted.