G.R. Nos. 86540-41 November 6, 1989
MANTRUSTE SYSTEMS, INC., petitioner, vs. THE HON. COURT OF APPEALS, ASSET PRIVATIZATION TRUST, MAKATI AGRO-TRADING, INC., and LA FILIPINA UY GONGCO. CORP., respondents.

FACTS

Petitioner Mantruste Systems, Inc. (MSI) entered into an interim lease agreement with the Development Bank of the Philippines (DBP) to operate the Bayview Plaza Hotel. The lease term was a minimum of three months “or until such time that said properties are sold to MSI or other third parties by DBP.” Pursuant to Proclamation No. 50, the hotel assets were transferred to the Asset Privatization Trust (APT) for privatization. APT terminated the lease, and MSI’s president signed a certification agreeing to the termination and to make the property available for inspection by bidders. However, MSI later claimed it had acquired a priority right to purchase the hotel as a long-term lessee and asserted a legal lien for its capital advances. During the public bidding, MSI posed several questions to APT regarding title and taxes but ultimately did not submit a bid. The property was awarded to the winning bidders, Makati Agro-Trading, Inc. and La Filipina Uy Gongco Corp. MSI then filed a complaint in the Regional Trial Court, which issued a writ of preliminary injunction to enjoin the award and its implementation.

ISSUE

The primary issue is whether the trial court gravely abused its discretion in issuing the writ of preliminary injunction against the APT’s privatization of the Bayview Hotel property.

RULING

The Supreme Court upheld the Court of Appeals’ decision setting aside the injunction. The Court ruled that the APT, as an administrative agency created under Proclamation No. 50, possesses broad authority to carry out the privatization of government assets. Judicial review over such executive functions is limited to determining whether there has been a grave abuse of discretion amounting to lack or excess of jurisdiction. Courts cannot substitute their judgment for that of the APT or block the implementation of its decisions regarding asset disposition, absent a constitutional violation, grave abuse of discretion, or act without jurisdiction. The lease provision stating the property could be sold to MSI or others did not confer a right of first refusal, but merely an equal right to bid. Even assuming a preferential status was informally indicated, MSI lost any such right by failing to participate in the public bidding. Its excuses for non-participation were unconvincing, and its claim that it would have submitted a higher bid was irrelevant and speculative since no bid was actually made. The injunction was improperly issued as it interfered with the APT’s lawful exercise of its privatization mandate.