Gios-Samar Inc. v. Department of Transportation and Communication and Civil Aviation
Authority of the Philippines
G.R. No. 217158 March 26, 2019
JARDELEZA, J.:
FACTS:
On December 15, 2014, the Department of Transportation and Communication (DOTC)
and its attached agency, the Civil Aviation Authority of the Philippines (CAAP), issued its
Invitation to Pre-qualify and bid on the airport development, operations and maintenance of six
key regional airports, which has a total cost of P116.23 Billion.
According to respondents, this project will be accomplished through a concession
agreement with a private section and will last for 30 years. It will be awarded through competitive
bidding, in accordance with the procurement rules and procedure prescribe under Republic Act
No. 6957 as amended by RA No. 7718 (BOT Law) and its Implementing Rules and Regulations.
On March 10, 2015, DOTC and CAAP issued the Instructions to Prospective Bidders
(ITPB), which provided the general procedure. In the ITBP, the projects were bundled into two,
which allows prospective bidders to bid for only Bundle 1 or Bundle 2, or bid for both Bundles.
The Pre-Qualification, Bids and Awards Committee (PBAC) will have its policy which would
determine whether a prospective bidder may be awarded both bundles or with only one bundle.
Before the actual submission of the Pre-Qualification of Queries and Qualification Documents,
Gios-Samar, suing as a taxpayer filed a petition for prohibition. Petitioner sought direct recourse
before the Supreme Court, invoking the transcendental importance of the issue. Petitioner in its
petition assailed the constitutionality of the bundling of the Projects and sought to enjoin the DOTC
and the CAAP from proceeding with the bidding.
In its petition, Gios-Samar raised that bundling of the Projects violated the constitutional
prohibitions the anti-dummy and the grant of opportunity to the general public to invest in public
utilities under Section 11, Article XII of the 1987 Constitution. It alleged that bundling would
allow companies with questionable or shaky financial background to have direct access to the
Projects by simply joining a consortium, which under the bundling scheme adopted by the DOTC
said Projects. Furthermore, assailed act of respondents violates the constitutional prohibition on
monopolies under Section 19, Article XII of the Constitution because it would allow one winning
bidder to operate and maintain several airports thus establishing a monopoly and bundling will
allow undue restraint of trade, since it will effective placed the projects beyond the reach of a
medium-sized Filipino companies. The petitioner also asserted that PBAC of the DOTC committed
grave abuse of discretion amounting to excess of jurisdiction when it bundled the projects without
legal authority. Lastly, it raised that bundling made a mockery of public bidding.
To counter the arguments raised by the petitioner, respondent DOTC asserted that petition raises
no justiciable question, since the petition is premature and there was no actual bidding yet. It also
stated in its comment that petitioner Gios-Samar has no legal standing to file the suit. Respondent
countered that allegation on the violation of anti-dummy and equal opportunity clauses of the
Constitution are speculative and conjectural. It also said that Section 11, Article XII of the
Constitution is not applicable to the bidding process assailed by petitioner. The bundling of the
Projects does not violate the prohibitions on monopolies or combinations in restraint of trade and
the DOTC and CAAP did not commit grave abuse of discretion amounting to lack or excess of
jurisdiction.
In addition to DOTC’s defense, CAAP claimed that petition failed to adhere to fundamental
principle of the doctrine of hierarchy of courts. Moreover, it asserted that petition failed to invoke
any special and compelling reason to seek direct recourse from the Court. Since petitioner raises
factual issues, in which it must be filed first in a trial court.
ISSUES:
1. Whether bundling of Projects creates monopoly, which violates the Section 19, Article XII
of the 1987 Constitution.
2. Whether bundling of Projects:
a.
allows the creation and operation of a combination in restraint of trade;
b.
violates anti-dummy laws and statutes giving citizens the opportunity to invest in
public utilities;
c.
is in grave abuse of discretion; and
d.
enables companies with shaky financial backgrounds to participate in the Projects.
3. Whether petitioner Gios-Samar Inc. violated the Doctrine of Hierarchy of Courts when it
sought direct recourse to the Supreme Court
RULING:
Petition was dismissed for the reason that legal issues raised by petitioner are intertwined
with underlying questions of fact, the determination of which requires reception of evidence. The
Supreme Court have said that it is not a trier of fact and it cannot resolve factual issue at first
instance.
1. No, there was no violation of constitution prohibition on monopoly.
Supreme Court cited its ruling on Tatad v. Secretary of Department of Energy, that
Constitution does not prohibit the operation of monopolies per se. In Anglo-Fil Trading
Company v. Lazaro, it clarified that certain public services such as those water, electricity,
transportation, telephone and telegraph, etc. must be given exclusive franchises if public
interest is to be served. Such exclusive franchises would not be violative of the law against
monopoly.
2.
a. Supreme Court have said that petitioner utterly failed to sufficiently state a cause of
action, by failing to plead ultimate facts to support its conclusion that bundling, as an
arrangement, is in restraint of trade or results in unfair competition under the provisions
of RA No. l0667. Even granting that the petition sufficiently pleads a cause of action
for the foregoing violations, there is a need to receive evidence to test the premises of
petitioner's conclusions. Court emphasized that it is not a trier of facts.
b. Petitioner’s allegation that bundling of Projects violated Article XII, Section 11 of the
Constitution, which prescribes a 60% Filipino ownership requirement for franchises,
certificate, or for the operation of public utilities was rejected. Petitioner Gios-Samar
failed to allege ultimate facts showing how the bundling of the Projects violated the
Anti-Dummy Law and it did not identify any corporation or association, which falsely
simulated the composition of its stock ownership.
c. The allegation that bundling is in grave abuse of discretion is a conclusion of law. As
shown, no facts were even alleged to show which specific law was violated by the
decision to bundle the Projects.
d. The Court have said that it is ill-equipped to resolve such question since it raises a
question of fact. Petitione did not identify the alleged ‘shady companies’.
3. Yes. The transcendental importance doctrine does not clothe the Supreme Court the power
to tackle factual questions and play the role of a trial court. The Doctrine of Hierarchy of
courts dictates that the direct recourse to the Supreme Court is allowed only to resolve
questions of law, notwithstanding the invocation of paramount or transcendental
importance of the action. Doctrine of Hierarchy of courts is not a mere policy but a
constitutional filtering mechanism designed to enable the Court to focus on more
fundamental and essential tasks assigned to it by the highest law of the land.