#145 SM Land, Inc. v.

Bases Conversion and Development AUTHOR: Pelayo

Authority Notes:
GR 203655 August 13, 2014 GR 203655 March 18, 2015 En Banc
TOPIC: State Immunity; Exemption from Legal Requirements
PONENTE:
CASE LAW/ DOCTRINE:
Where an agency, instrumentality or officer of the government evades the performance of a positive duty enjoined by lawwherein the
exercise of judicial power is warranted. Consistent with the Courts solemn obligation to afford protection by ensuring that grave abuses
of discretion on the part of a branch or instrumentality of the government do not go unchecked, the Petition for Certiorari must be granted
and the corresponding injunctive relief be made permanent.

FACTS:
When BCDA opened for disposition its Bonifacio South Property pursuant to RA 7227, SMLI offered to undertake the development
of said property by submitting a succession of unsolicited proposals to BCDA.
BCDA then entered into negotiations with SMLI until the BCDA finally accepted the terms of the final unsolicited proposal. Their
agreement was thereafter reduced into writing through the issuance of the Certification of Successful Negotiations in 2010.
It was agreed that BCDA accepted SMLIs unsolicited proposal and declared SMLI eligible to enter into the proposed Joint Venture
activity.
It also agreed to subject SMLIs Original Proposal to Competitive Challenge pursuant to NEDA Joint Venture Guidelines, which
competitive challenge process shall be immediately implemented following the Terms of Reference.
Moreover, said Certification provides that the BCDA shall commence the activities for the solicitation for comparative proposals.
Years later however, the BCDA through the issuance of Supplemental Notice No. 5 terminated the competitive challenge for the
selection of BCDAs joint venture partner for the development of a portion of Fort Bonifacio.
SMLI, through a petition for CPM, argued that BCDAs unilateral termination of the competitive challenge is a violation of SMLIs
rights as an original proponent and constitutes abandonment of BCDAs contractual obligations.
BCDA, on the other hand, responded that it is justifiable since NEDA JV Guidelines is a mere guideline and not a law, and that the
Government has a right to terminate the competitive challenge when the terms are disadvantageous to public interest.

ISSUE(S):
Issue 1: WON the NEDA JV Guidelines has the binding effect and force of law
Issue 2: WON BCDA committed grave abuse of discretion in issuing Supplemental Notice No. 5
Issue 3: WON the BCDA is in estoppel

HELD: Yes to all.

RATIO:

1.) Yes. Administrative issuances, such as the NEDA JV Guidelines, duly promulgated pursuant to the rule-making power granted by
statute, have the force and effect of law. Being an issuance in compliance with an executive edict, the NEDA JV Guidelines has the
same binding effect as if it were issued by the President himself, who parenthetically is a member of NEDA. As such, no agency or
instrumentality covered by the JV Guidelines can validly deviate from the mandatory procedures set forth therein, even if the
other party acquiesced therewith or not.
2.) Yes. Being an instrumentality of the government, it is incumbent upon the BCDA to abide by the laws, rules and regulations, and
perform its obligations with utmost good faith. It cannot, under the guise of protecting the public interest, disregard the clear
mandate of the NEDA JV Guidelines and unceremoniously disregard the very commitments it made to the prejudice of the SMLI
that innocently relied on such promises. It is in instances such as thiswhere an agency, instrumentality or officer of the
government evades the performance of a positive duty enjoined by lawwherein the exercise of judicial power is warranted.
Consistent with the Courts solemn obligation to afford protection by ensuring that grave abuses of discretion on the part of a
branch or instrumentality of the government do not go unchecked, the Petition for Certiorari must be granted and the
corresponding injunctive relief be made permanent.
3.) Yes. Although as a general rule, the government cannot be estopped by the mistakes or errors of its officials or agents, such will
not apply if injustice is perpetrated. To allow BCDA to renege on its statutory and contractual obligations would cause grave
prejudice to petitioner, who already invested time, effort, and resources in the study and formulation of the proposal, in the
adjustment thereof, as well as in the negotiations. To permit BCDA to suddenly cancel the procurement process and strip SMLI of
its earlier-enumerated rights as an Original Proponent at this pointafter the former has already benefited from SMLIs proposal
through the acquisition of information and ideas for the development of the subject propertywould unjustly enrich the agency
through the efforts of petitioner. What is worse, to do so would be contrary to BCDAs representations and assurances that it will
respect SMLIs earlier acquired rights, which statements SMLI reasonably and innocently believed. All told, the BCDAs acceptance
of the unsolicited proposal and the successful in-depth negotiation cannot be written off as mere mistake or error that
respondents claim to be reversible and not susceptible to the legal bar of estoppel. The subsequent cancellation of the Competitive
Challenge on grounds that infringe the contractual rights of SMLI and violate the NEDA JV Guidelines cannot be shrouded with
legitimacy by invoking the estoppel rule.

DISSENTING/CONCURRING OPINION(S): N/A