GR 124293; (January, 2005) (Digest)
G.R. No. 124293 ; January 31, 2005
J.G. SUMMIT HOLDINGS, INC., petitioner, vs. COURT OF APPEALS; COMMITTEE ON PRIVATIZATION; ASSET PRIVATIZATION TRUST; and PHILYARDS HOLDINGS, INC., respondents.
FACTS
The National Government, through the Asset Privatization Trust (APT), conducted a public bidding for its 87.67% equity in Philippine Shipyard and Engineering Corporation (PHILSECO). The bidding was governed by Asset Specific Bidding Rules (ASBR) which included an “Option to Top” granted to Kawasaki Heavy Industries, Ltd. (KAWASAKI), the original joint venture partner, allowing it or its nominee to match the highest bid plus five percent. Petitioner J.G. Summit Holdings, Inc. submitted the highest bid. KAWASAKI’s nominee, respondent Philyards Holdings, Inc. (PHI), subsequently exercised the option to top. APT declared PHI the winning bidder.
J.G. Summit challenged this, arguing the “Option to Top” violated the right of first refusal in the original Joint Venture Agreement (JVA) and the public bidding process. The Court of Appeals initially ruled in favor of J.G. Summit, but the Supreme Court, in a Resolution dated September 24, 2003, reversed this and upheld the validity of the sale to PHI. J.G. Summit filed motions for reconsideration and to elevate the case to the Court En Banc.
ISSUE
The primary issue is whether the Supreme Court’s First Division correctly denied the motions for reconsideration and referral to the Court En Banc, thereby affirming the validity of the “Option to Top” and the sale of the PHILSECO shares to PHI.
RULING
The Court denied the motions. On the substantive merits, the Court upheld its prior ruling that the “Option to Top” was a valid modification of the original right of first refusal, mutually agreed upon by APT (as trustee for the National Government) and KAWASAKI. The ASBR, which contained the “Option to Top” terms, were made known to all bidders, including J.G. Summit, prior to the auction. By participating, J.G. Summit accepted these conditions and assumed the risk that its highest bid could be topped. The process did not violate principles of competitive bidding as the rules were transparent and applied equally.
Regarding procedural matters, the Court emphasized that a motion for reconsideration of a Division ruling is not a right but addressed to the court’s sound discretion. No compelling reason was shown to warrant reversal. Furthermore, the request to refer the case to the Court En Banc was properly denied. Under the Constitution and internal rules, the Court En Banc is not an appellate body over Division rulings. A Division may refer cases involving novel or important questions, but this is discretionary. The subject matter, involving the interpretation of contractual stipulations in a privatization, did not present such a transcendental issue requiring the En Banc’s attention. Thus, the First Division’s Resolution stands as final.