G.R. No. 218787 , December 8, 2015
LEO Y. QUERUBIN, ET AL. VS. COMMISSION ON ELECTIONS EN BANC, ET AL.

FACTS

Petitioners filed a Petition for Certiorari assailing the COMELEC En Banc Decision that declared the Smartmatic Joint Venture as the winning bidder for the lease of an Optical Mark Reader system for the 2016 elections. The controversy centered on the eligibility of the joint venture. Its largest partner, Smartmatic-TIM Corporation (SMTC), submitted its bid documents on December 4, 2014, while its proposed amendments to its Articles of Incorporation were still pending with the Securities and Exchange Commission (SEC). At that time, SMTC’s primary corporate purpose, as stated in its then-current Articles, was limited to the automation of the 2010 elections. The SEC approved the amended Articles, which broadened SMTC’s corporate purpose, only on December 10, 2014, six days after the bid submission deadline.
The COMELEC’s bidding documents required the submission of a valid SEC registration certificate. Petitioners argued that the Smartmatic Joint Venture was ineligible because, at the time of bid submission, SMTC’s Articles of Incorporation did not authorize it to undertake the 2016 automation project, rendering its bid documents defective. The COMELEC En Banc upheld the joint venture’s eligibility, leading to this petition.

ISSUE

Whether the Petition for Certiorari should be granted, thereby nullifying the COMELEC’s award of the contract to the Smartmatic Joint Venture.

RULING

Justice Leonen, in a Concurring and Dissenting Opinion, concurred only in the result of dismissing the petition but dissented from the ponencia’s substantive ruling. He agreed that the petition should be dismissed for lack of jurisdiction, holding that the Regional Trial Court has original and exclusive jurisdiction over matters pertaining to the administrative actions of the head of a procuring agency under Republic Act No. 9184 . Therefore, the Supreme Court should not have taken cognizance of the case, rendering a discussion on the merits unnecessary.
However, Justice Leonen strongly disagreed with the ponencia’s obiter dictum that a valid Articles of Incorporation is not an eligibility requirement. He argued that the COMELEC’s own bidding instructions explicitly required it. A corporation’s Articles of Incorporation define the scope of its corporate powers; acts beyond this scope are ultra vires. Consequently, at the critical moment of bid submission, SMTC lacked the legal capacity to enter into the contract for the 2016 project, as its corporate purpose was still confined to the 2010 elections. The subsequent SEC approval of the amended Articles did not retroactively cure this eligibility defect existing on the bid deadline. Thus, while the petition was correctly dismissed on jurisdictional grounds, Justice Leonen believed the Smartmatic Joint Venture should have been disqualified for failing to meet a mandatory eligibility requirement at the time prescribed by law.