G.R. No. 239871 , March 18, 2021
Lynna G. Chung, Petitioner, vs. Office of the Ombudsman and Office of the Ombudsman-Field Investigation Office, Respondents.

FACTS

The Philippine National Railways (PNR) Bids and Awards Committee (BAC) recommended Direct Contracting with Pandrol Korea Limited for the procurement of rail fastenings, clips, and insulators. Petitioner Lynna G. Chung, then Manager of the PNR’s Administrative and Finance Department and a BAC member, inhibited herself from the proceedings because she is the adoptive mother of Jaewoo Chung, the Manila Liaison Officer of Pandrol Korea. The PNR Board approved the recommendation, and a contract was executed. The contract stipulated payment via an irrevocable letter of credit (LC) and included a schedule for advance (15%) and final (85%) payments contingent upon submission of shipping documents. Petitioner, upon the directive of PNR General Manager Manuel D. Andal, sent letters to banks to debit PNR accounts to cover the peso equivalent of dollar amounts for opening the LCs in favor of Pandrol Korea. The Ombudsman’s Field Investigation Office filed a complaint alleging irregularities, including that payments were made in full without adhering to the contract’s payment schedule and before Pandrol Korea submitted required documents. After preliminary investigation, the Ombudsman found probable cause to indict petitioner and five other PNR officials for violation of Section 3(e) of R.A. No. 3019 (Anti-Graft and Corrupt Practices Act). The Ombudsman held that petitioner’s failure to ensure payments complied with the contract terms, coupled with her relationship to Pandrol Korea’s liaison officer, indicated bad faith, manifest partiality, or gross inexcusable negligence.

ISSUE

Whether the Ombudsman gravely abused its discretion in finding probable cause against petitioner for violation of Section 3(e) of R.A. No. 3019 .

RULING

No, the Ombudsman did not gravely abuse its discretion. The Petition for Certiorari was granted, and the assailed Joint Resolution and Order of the Ombudsman were set aside insofar as petitioner Lynna G. Chung is concerned. The Court found that the Ombudsman committed grave abuse of discretion in finding probable cause against petitioner. The evidence did not establish that petitioner, in her ministerial act of sending letters to banks to debit PNR accounts for the LC openings upon Andal’s directive, acted with manifest partiality, evident bad faith, or gross inexcusable negligence as required under Section 3(e) of R.A. No. 3019 . The act of opening an LC is not equivalent to actual payment; it is a bank’s commitment to pay upon submission of complying documents. The contract required Pandrol Korea to submit a Letter of Guarantee before any advance payment, and the final payment was contingent upon presentation of shipping documents to the bank. There was no showing that these safeguards were bypassed due to petitioner’s actions. Furthermore, her inhibition from the BAC proceedings negated any allegation of partiality. The Ombudsman’s finding was based on a misapprehension of the nature of an LC and petitioner’s role, constituting a capricious and whimsical exercise of judgment.