GR 214864; (March, 2017) (Digest)
G.R. No. 214864 , March 22, 2017
PHILIPPINE PORTS AUTHORITY (PPA) vs. NASIPIT INTEGRATED ARRASTRE AND STEVEDORING SERVICES, INC. (NIASSI)
FACTS
The Philippine Ports Authority (PPA) accepted bids for a 10-year cargo-handling contract at the Port of Nasipit. Its Pre-qualification, Bids and Awards Committee recommended the award to respondent NIASSI as the winning bidder. Despite a protest from another bidder, PPA issued a Notice of Award to NIASSI in December 2000, which NIASSI accepted. However, due to the pending protest, NIASSI requested a Hold-Over Authority (HOA) instead of a formal contract. PPA granted this request and issued several HOA extensions. In December 2004, PPA revoked the HOA, citing complaints about NIASSI’s services, and took over the port operations.
NIASSI filed a Petition for Mandamus before the Regional Trial Court (RTC) to compel PPA to formally execute the 10-year contract and to issue a writ of preliminary mandatory injunction to restore its operations. The RTC initially granted the writ but later reconsidered and quashed it. The Court of Appeals (CA) later reversed the RTC, ordering the execution of the contract and reinstating the writ of preliminary mandatory injunction. PPA elevated the case to the Supreme Court via a Petition for Review on Certiorari.
ISSUE
Whether the Court of Appeals erred in granting NIASSI’s Petition for Mandamus to compel PPA to formally execute the 10-year cargo-handling contract.
RULING
The Supreme Court granted PPA’s petition and reversed the CA’s decision. The Court held that mandamus does not lie to compel the execution of the contract. Mandamus is a remedy to compel the performance of a ministerial duty, not a discretionary one. The act of entering into a contract on behalf of the government is inherently discretionary, involving the exercise of judgment. PPA’s issuance of a Notice of Award did not strip it of this discretion or automatically create a perfected contract, especially given the unresolved protest and the subsequent issuance of only temporary HOAs.
Furthermore, the Court emphasized that equity must be considered. The factual circumstances had drastically changed since the Notice of Award in 2000. Compelling the execution of a 10-year contract nearly two decades later, based on conditions that no longer existed, would be unreasonable and iniquitous. The long passage of time and the altered operational landscape rendered the specific enforcement of the alleged contract inequitable. Therefore, the action for mandamus was improper, and the case before the RTC was correctly dismissed.