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mEN BANC
[G.R. No. 93867 : December 18, 1990.]
192 SCRA 358
SIXTO S. BRILLANTES, JR., Petitioner, vs. HAYDEE B. YORAC, in her capacity as ACTING
CHAIRPERSON of the COMMISSION ON ELECTIONS, Respondent.
D E C I S I O N
CRUZ, J.:
The petitioner is challenging the designation by the President of the Philippines of Associate
Commissioner Haydee B. Yorac as Acting Chairman of the Commission on Elections, in place of
Chairman Hilario B. Davide, who had been named chairman of the fact-finding commission to
investigate the December 1989 coup d' etat attempt.
The qualifications of the respondent are conceded by the petitioner and are not in issue in this
case. What is the power of the President of the Philippines to make the challenged designation in
view of the status of the Commission on Elections as an independent constitutional body and the
specific provision of Article IX-C, Section 1(2) of the Constitution that "(I)n no case shall any
Member (of the Commission on Elections) be appointed or designated in a temporary or acting
capacity."
The petitioner invokes the case of Nacionalista Party v. Bautista, 85 Phil. 101, where President
Elpidio Quirino designated the Solicitor General as acting member of the Commission on Elections
and the Court revoked the designation as contrary to the Constitution. It is also alleged that the
respondent is not even the senior member of the Commission on Elections, being outranked by
Associate Commissioner Alfredo E. Abueg, Jr.:-cralaw
The petitioner contends that the choice of the Acting Chairman of the Commission on Elections is
an internal matter that should be resolved by the members themselves and that the intrusion of
the President of the Philippines violates their independence. He cites the practice in this Court,
where the senior Associate Justice serves as Acting Chief Justice in the absence of the Chief Justice.
No designation from the President of the Philippines is necessary.
In his Comment, the Solicitor General argues that no such designation is necessary in the case of
the Supreme Court because the temporary succession cited is provided for in Section 12 of the
Judiciary Act of 1948. A similar rule is found in Section 5 of BP 129 for the Court of Appeals. There
is no such arrangement, however, in the case of the Commission on Elections. The designation
made by the President of the Philippines should therefore be sustained for reasons of
"administrative expediency," to prevent disruption of the functions of the COMELEC.
Expediency is a dubious justification. It may also be an overstatement to suggest that the
operations of the Commission on Elections would have been disturbed or stalemated if the
President of the Philippines had not stepped in and designated an Acting Chairman. There did not
seem to be any such problem. In any event, even assuming that difficulty, we do not agree that
"only the President (could) act to fill the hiatus," as the Solicitor General maintains.
Article IX-A, Section 1, of the Constitution expressly describes all the Constitutional Commissions
as "independent." Although essentially executive in nature, they are not under the control of the
President of the Philippines in the discharge of their respective functions. Each of these
Commissions conducts its own proceedings under the applicable laws and its own rules and in the
exercise of its own discretion. Its decisions, orders and rulings are subject only to review
on Certiorari by this Court as provided by the Constitution in Article IX-A, Section 7.

2. The choice of a temporary chairman in the absence of the regular chairman comes under that
discretion. That discretion cannot be exercised for it, even with its consent, by the President of the
Philippines.
A designation as Acting Chairman is by its very terms essentially temporary and therefore
revocable at will. No cause need be established to justify its revocation. Assuming its validity, the
designation of the respondent as Acting Chairman of the Commission on Elections may be
withdrawn by the President of the Philippines at any time and for whatever reason she sees fit. It
is doubtful if the respondent, having accepted such designation, will not be estopped from
challenging its withdrawal.chanrobles virtual law library
It is true, as the Solicitor General points out, that the respondent cannot be removed at will from
her permanent position as Associate Commissioner. It is no less true, however, that she can be
replaced as Acting Chairman, with or without cause, and thus deprived of the powers and
perquisites of that temporary position.
The lack of a statutory rule covering the situation at bar is no justification for the President of the
Philippines to fill the void by extending the temporary designation in favor of the respondent. This
is still a government of laws and not of men. The problem allegedly sought to be corrected, if it
existed at all, did not call for presidential action. The situation could have been handled by the
members of the Commission on Elections themselves without the participation of the President,
however well-meaning.
In the choice of the Acting Chairman, the members of the Commission on Elections would most
likely have been guided by the seniority rule as they themselves would have appreciated it. In any
event, that choice and the basis thereof were for them and not the President to make.
The Court has not the slightest doubt that the President of the Philippines was moved only by the
best of motives when she issued the challenged designation. But while conceding her goodwill, we
cannot sustain her act because it conflicts with the Constitution. Hence, even as this Court revoked
the designation in the Bautista case, so too must it annul the designation in the case at bar.
The Constitution provides for many safeguards to the independence of the Commission on
Elections, foremost among which is the security of tenure of its members. That guaranty is not
available to the respondent as Acting Chairman of the Commission on Elections by designation of
the President of the Philippines.
WHEREFORE, the designation by the President of the Philippines of respondent Haydee B. Yorac as
Acting Chairman of the Commission on Elections is declared UNCONSTITUTIONAL, and the
respondent is hereby ordered to desist from serving as such. This is without prejudice to the
incumbent Associate Commissioners of the Commission on Elections restoring her to the same
position if they so desire, or choosing another member in her place, pending the appointment of a
permanent Chairman by the President of the Philippines with the consent of the Commission on
Appointments.: rd
SO ORDERED.
SECOND DIVISION
G.R. No. 100113 September 3, 1991
RENATO CAYETANO, petitioner,
vs.
CHRISTIAN MONSOD, HON. JOVITO R. SALONGA, COMMISSION ON APPOINTMENT, and HON.
GUILLERMO CARAGUE, in his capacity as Secretary of Budget and Management, respondents.
Renato L. Cayetano for and in his own behalf.
Sabina E. Acut, Jr. and Mylene Garcia-Albano co-counsel for petitioner.
PARAS, J.:p
We are faced here with a controversy of far-reaching proportions. While ostensibly only legal
issues are involved, the Court's decision in this case would indubitably have a profound effect on
the political aspect of our national existence.
The 1987 Constitution provides in Section 1 (1), Article IX-C:
There shall be a Commission on Elections composed of a Chairman and six
Commissioners who shall be natural-born citizens of the Philippines and, at
the time of their appointment, at least thirty-five years of age, holders of a
college degree, and must not have been candidates for any elective position
in the immediately preceding -elections. However, a majority thereof,
including the Chairman, shall be members of the Philippine Bar who have
been engaged in the practice of law for at least ten years. (Emphasis supplied)
The aforequoted provision is patterned after Section l(l), Article XII-C of the 1973 Constitution
which similarly provides:
There shall be an independent Commission on Elections composed of a Chairman and eight
Commissioners who shall be natural-born citizens of the Philippines and, at the time of their
appointment, at least thirty-five years of age and holders of a college degree. However, a majority
thereof, including the Chairman, shall be members of the Philippine Bar who have been engaged
in the practice of law for at least ten years.' (Emphasis supplied)
Regrettably, however, there seems to be no jurisprudence as to what constitutes practice of law as
a legal qualification to an appointive office.
Black defines "practice of law" as:
The rendition of services requiring the knowledge and the application of legal principles and
technique to serve the interest of another with his consent. It is not limited to appearing in
court, or advising and assisting in the conduct of litigation, but embraces the preparation of
pleadings, and other papers incident to actions and special proceedings, conveyancing, the
preparation of legal instruments of all kinds, and the giving of all legal advice to clients. It
embraces all advice to clients and all actions taken for them in matters connected with the
law. An attorney engages in the practice of law by maintaining an office where he is held
out to be-an attorney, using a letterhead describing himself as an attorney, counseling
clients in legal matters, negotiating with opposing counsel about pending litigation, and
fixing and collecting fees for services rendered by his associate. (Black's Law Dictionary, 3rd
ed.)

3. The practice of law is not limited to the conduct of cases in court. (Land Title Abstract and Trust
Co. v. Dworken,129 Ohio St. 23, 193 N.E. 650) A person is also considered to be in the practice of
law when he:
... for valuable consideration engages in the business of advising person, firms, associations
or corporations as to their rights under the law, or appears in a representative capacity as
an advocate in proceedings pending or prospective, before any court, commissioner,
referee, board, body, committee, or commission constituted by law or authorized to settle
controversies and there, in such representative capacity performs any act or acts for the
purpose of obtaining or defending the rights of their clients under the law. Otherwise
stated, one who, in a representative capacity, engages in the business of advising clients as
to their rights under the law, or while so engaged performs any act or acts either in court or
outside of court for that purpose, is engaged in the practice of law. (State ex. rel. Mckittrick
v..C.S. Dudley and Co., 102 S.W. 2d 895, 340 Mo. 852)
This Court in the case of Philippine Lawyers Association v.Agrava, (105 Phil. 173,176-177) stated:
The practice of law is not limited to the conduct of cases or litigation in court; it embraces the
preparation of pleadings and other papers incident to actions and special proceedings, the
management of such actions and proceedings on behalf of clients before judges and courts,
and in addition, conveying. In general, all advice to clients, and all action taken for them in
mattersconnected with the law incorporation services, assessment and condemnation
services contemplating an appearance before a judicial body, the foreclosure of a mortgage,
enforcement of a creditor's claim in bankruptcy and insolvency proceedings, and conducting
proceedings in attachment, and in matters of estate and guardianship have been held to
constitute law practice, as do the preparation and drafting of legal instruments, where the
work done involves the determination by the trained legal mind of the legal effect of facts and
conditions. (5 Am. Jr. p. 262, 263). (Emphasis supplied)
Practice of law under modem conditions consists in no small part of work performed outside
of any court and having no immediate relation to proceedings in court. It embraces
conveyancing, the giving of legal advice on a large variety of subjects, and the preparation
and execution of legal instruments covering an extensive field of business and trust relations
and other affairs. Although these transactions may have no direct connection with court
proceedings, they are always subject to become involved in litigation. They require in many
aspects a high degree of legal skill, a wide experience with men and affairs, and great
capacity for adaptation to difficult and complex situations. These customary functions of an
attorney or counselor at law bear an intimate relation to the administration of justice by the
courts. No valid distinction, so far as concerns the question set forth in the order, can be
drawn between that part of the work of the lawyer which involves appearance in court and
that part which involves advice and drafting of instruments in his office. It is of importance to
the welfare of the public that these manifold customary functions be performed by persons
possessed of adequate learning and skill, of sound moral character, and acting at all times
under the heavy trust obligations to clients which rests upon all attorneys.
(Moran, Comments on the Rules of Court, Vol. 3 [1953 ed.] , p. 665-666, citing In re Opinion of
the Justices [Mass.], 194 N.E. 313, quoted in Rhode Is. Bar Assoc. v. Automobile Service Assoc.
[R.I.] 179 A. 139,144). (Emphasis ours)
The University of the Philippines Law Center in conducting orientation briefing for new lawyers
(1974-1975) listed the dimensions of the practice of law in even broader terms as advocacy,
counselling and public service.
One may be a practicing attorney in following any line of employment in the profession. If
what he does exacts knowledge of the law and is of a kind usual for attorneys engaging in
the active practice of their profession, and he follows some one or more lines of
employment such as this he is a practicing attorney at law within the meaning of the
statute. (Barr v. Cardell, 155 NW 312)
Practice of law means any activity, in or out of court, which requires the application of law, legal
procedure, knowledge, training and experience. "To engage in the practice of law is to perform
those acts which are characteristics of the profession. Generally, to practice law is to give notice or
render any kind of service, which device or service requires the use in any degree of legal
knowledge or skill." (111 ALR 23)
The following records of the 1986 Constitutional Commission show that it has adopted a liberal
interpretation of the term "practice of law."
MR. FOZ. Before we suspend the session, may I make a manifestation which I forgot to do during
our review of the provisions on the Commission on Audit. May I be allowed to make a very brief
statement?
THE PRESIDING OFFICER (Mr. Jamir).
The Commissioner will please proceed.
MR. FOZ. This has to do with the qualifications of the members of the Commission on Audit. Among
others, the qualifications provided for by Section I is that "They must be Members of the Philippine
Bar" — I am quoting from the provision — "who have been engaged in the practice of law for at
least ten years".
To avoid any misunderstanding which would result in excluding members of the Bar who are now
employed in the COA or Commission on Audit, we would like to make the clarification that this
provision on qualifications regarding members of the Bar does not necessarily refer or involve
actual practice of law outside the COA We have to interpret this to mean that as long as the
lawyers who are employed in the COA are using their legal knowledge or legal talent in their
respective work within COA, then they are qualified to be considered for appointment as members
or commissioners, even chairman, of the Commission on Audit.
This has been discussed by the Committee on Constitutional Commissions and Agencies and we
deem it important to take it up on the floor so that this interpretation may be made available
whenever this provision on the qualifications as regards members of the Philippine Bar engaging in
the practice of law for at least ten years is taken up.
MR. OPLE. Will Commissioner Foz yield to just one question.
MR. FOZ. Yes, Mr. Presiding Officer.
MR. OPLE. Is he, in effect, saying that service in the COA by a lawyer is equivalent to the
requirement of a law practice that is set forth in the Article on the Commission on Audit?
MR. FOZ. We must consider the fact that the work of COA, although it is auditing, will necessarily
involve legal work; it will involve legal work. And, therefore, lawyers who are employed in COA now
would have the necessary qualifications in accordance with the Provision on qualifications under
our provisions on the Commission on Audit. And, therefore, the answer is yes.
MR. OPLE. Yes. So that the construction given to this is that this is equivalent to the practice of
law.
MR. FOZ. Yes, Mr. Presiding Officer.

4. MR. OPLE. Thank you.
... ( Emphasis supplied)
Section 1(1), Article IX-D of the 1987 Constitution, provides, among others, that the Chairman and
two Commissioners of the Commission on Audit (COA) should either be certified public
accountants with not less than ten years of auditing practice, or members of the Philippine Bar
who have been engaged in the practice of law for at least ten years. (emphasis supplied)
Corollary to this is the term "private practitioner" and which is in many ways synonymous with the
word "lawyer." Today, although many lawyers do not engage in private practice, it is still a fact
that the majority of lawyers are private practitioners. (Gary Munneke, Opportunities in Law
Careers [VGM Career Horizons: Illinois], [1986], p. 15).
At this point, it might be helpful to define private practice. The term, as commonly understood,
means "an individual or organization engaged in the business of delivering legal services." (Ibid.).
Lawyers who practice alone are often called "sole practitioners." Groups of lawyers are called
"firms." The firm is usually a partnership and members of the firm are the partners. Some firms
may be organized as professional corporations and the members called shareholders. In either
case, the members of the firm are the experienced attorneys. In most firms, there are younger or
more inexperienced salaried attorneyscalled "associates." (Ibid.).
The test that defines law practice by looking to traditional areas of law practice is essentially
tautologous, unhelpful defining the practice of law as that which lawyers do. (Charles W.
Wolfram, Modern Legal Ethics [West Publishing Co.: Minnesota, 1986], p. 593). The practice of law
is defined as the performance of any acts . . . in or out of court, commonly understood to be the
practice of law. (State Bar Ass'n v. Connecticut Bank & Trust Co., 145 Conn. 222, 140 A.2d 863, 870
[1958] [quoting Grievance Comm. v. Payne, 128 Conn. 325, 22 A.2d 623, 626 [1941]). Because
lawyers perform almost every function known in the commercial and governmental realm, such a
definition would obviously be too global to be workable.(Wolfram, op. cit.).
The appearance of a lawyer in litigation in behalf of a client is at once the most publicly familiar
role for lawyers as well as an uncommon role for the average lawyer. Most lawyers spend little
time in courtrooms, and a large percentage spend their entire practice without litigating a case.
(Ibid., p. 593). Nonetheless, many lawyers do continue to litigate and the litigating lawyer's role
colors much of both the public image and the self perception of the legal profession. (Ibid.).
In this regard thus, the dominance of litigation in the public mind reflects history, not reality.
(Ibid.). Why is this so? Recall that the late Alexander SyCip, a corporate lawyer, once articulated on
the importance of a lawyer as a business counselor in this wise: "Even today, there are still
uninformed laymen whose concept of an attorney is one who principally tries cases before the
courts. The members of the bench and bar and the informed laymen such as businessmen, know
that in most developed societies today, substantially more legal work is transacted in law offices
than in the courtrooms. General practitioners of law who do both litigation and non-litigation work
also know that in most cases they find themselves spending more time doing what [is] loosely
desccribe[d] as business counseling than in trying cases. The business lawyer has been described
as the planner, the diagnostician and the trial lawyer, the surgeon. I[t] need not [be] stress[ed]
that in law, as in medicine, surgery should be avoided where internal medicine can be effective."
(Business Star, "Corporate Finance Law," Jan. 11, 1989, p. 4).
In the course of a working day the average general practitioner wig engage in a number of legal
tasks, each involving different legal doctrines, legal skills, legal processes, legal institutions, clients,
and other interested parties. Even the increasing numbers of lawyers in specialized practice wig
usually perform at least some legal services outside their specialty. And even within a narrow
specialty such as tax practice, a lawyer will shift from one legal task or role such as advice-giving to
an importantly different one such as representing a client before an administrative agency.
(Wolfram, supra, p. 687).
By no means will most of this work involve litigation, unless the lawyer is one of the relatively rare
types — a litigator who specializes in this work to the exclusion of much else. Instead, the work will
require the lawyer to have mastered the full range of traditional lawyer skills of client counselling,
advice-giving, document drafting, and negotiation. And increasingly lawyers find that the new skills
of evaluation and mediation are both effective for many clients and a source of employment.
(Ibid.).
Most lawyers will engage in non-litigation legal work or in litigation work that is constrained in
very important ways, at least theoretically, so as to remove from it some of the salient features of
adversarial litigation. Of these special roles, the most prominent is that of prosecutor. In some
lawyers' work the constraints are imposed both by the nature of the client and by the way in which
the lawyer is organized into a social unit to perform that work. The most common of these roles
are those of corporate practice and government legal service. (Ibid.).
In several issues of the Business Star, a business daily, herein below quoted are emerging trends in
corporate law practice, a departure from the traditional concept of practice of law.
We are experiencing today what truly may be called a revolutionary transformation in corporate
law practice. Lawyers and other professional groups, in particular those members participating
in various legal-policy decisional contexts, are finding that understanding the major emerging
trends in corporation law is indispensable to intelligent decision-making.
Constructive adjustment to major corporate problems of today requires an accurate
understanding of the nature and implications of the corporate law research function
accompanied by an accelerating rate of information accumulation. The recognition of the need
for such improved corporate legal policy formulation, particularly "model-making" and
"contingency planning," has impressed upon us the inadequacy of traditional procedures in
many decisional contexts.
In a complex legal problem the mass of information to be processed, the sorting and weighing
of significant conditional factors, the appraisal of major trends, the necessity of estimating the
consequences of given courses of action, and the need for fast decision and response in
situations of acute danger have prompted the use of sophisticated concepts of information flow
theory, operational analysis, automatic data processing, and electronic computing equipment.
Understandably, an improved decisional structure must stress the predictive component of the
policy-making process, wherein a "model", of the decisional context or a segment thereof is
developed to test projected alternative courses of action in terms of futuristic effects flowing
therefrom.
Although members of the legal profession are regularly engaged in predicting and projecting
the trends of the law, the subject of corporate finance law has received relatively little

5. organized and formalized attention in the philosophy of advancing corporate legal education.
Nonetheless, a cross-disciplinary approach to legal research has become a vital necessity.
Certainly, the general orientation for productive contributions by those trained primarily in
the law can be improved through an early introduction to multi-variable decisional context
and the various approaches for handling such problems. Lawyers, particularly with either a
master's or doctorate degree in business administration or management, functioning at the
legal policy level of decision-making now have some appreciation for the concepts and
analytical techniques of other professions which are currently engaged in similar types of
complex decision-making.
Truth to tell, many situations involving corporate finance problems would require the
services of an astute attorney because of the complex legal implications that arise from each
and every necessary step in securing and maintaining the business issue raised. (Business
Star, "Corporate Finance Law," Jan. 11, 1989, p. 4).
In our litigation-prone country, a corporate lawyer is assiduously referred to as the "abogado
de campanilla." He is the "big-time" lawyer, earning big money and with a clientele
composed of the tycoons and magnates of business and industry.
Despite the growing number of corporate lawyers, many people could not explain what it is
that a corporate lawyer does. For one, the number of attorneys employed by a single
corporation will vary with the size and type of the corporation. Many smaller and some large
corporations farm out all their legal problems to private law firms. Many others have in-
house counsel only for certain matters. Other corporation have a staff large enough to handle
most legal problems in-house.
A corporate lawyer, for all intents and purposes, is a lawyer who handles the legal affairs of a
corporation. His areas of concern or jurisdiction may include, inter alia: corporate legal
research, tax laws research, acting out as corporate secretary (in board meetings),
appearances in both courts and other adjudicatory agencies (including the Securities and
Exchange Commission), and in other capacities which require an ability to deal with the law.
At any rate, a corporate lawyer may assume responsibilities other than the legal affairs of the
business of the corporation he is representing. These include such matters as determining
policy and becoming involved in management. ( Emphasis supplied.)
In a big company, for example, one may have a feeling of being isolated from the action, or
not understanding how one's work actually fits into the work of the orgarnization. This can be
frustrating to someone who needs to see the results of his work first hand. In short, a
corporate lawyer is sometimes offered this fortune to be more closely involved in the running
of the business.
Moreover, a corporate lawyer's services may sometimes be engaged by a multinational
corporation (MNC). Some large MNCs provide one of the few opportunities available to
corporate lawyers to enter the international law field. After all, international law is practiced
in a relatively small number of companies and law firms. Because working in a foreign
country is perceived by many as glamorous, tills is an area coveted by corporate lawyers. In
most cases, however, the overseas jobs go to experienced attorneys while the younger
attorneys do their "international practice" in law libraries. (Business Star, "Corporate Law
Practice," May 25,1990, p. 4).
This brings us to the inevitable, i.e., the role of the lawyer in the realm of finance. To borrow
the lines of Harvard-educated lawyer Bruce Wassertein, to wit: "A bad lawyer is one who fails
to spot problems, a good lawyer is one who perceives the difficulties, and the excellent
lawyer is one who surmounts them." (Business Star, "Corporate Finance Law," Jan. 11, 1989,
p. 4).
Today, the study of corporate law practice direly needs a "shot in the arm," so to speak. No
longer are we talking of the traditional law teaching method of confining the subject study to
the Corporation Code and the Securities Code but an incursion as well into the intertwining
modern management issues.
Such corporate legal management issues deal primarily with three (3) types of learning: (1)
acquisition of insights into current advances which are of particular significance to the
corporate counsel; (2) an introduction to usable disciplinary skins applicable to a corporate
counsel's management responsibilities; and (3) a devotion to the organization and
management of the legal function itself.
These three subject areas may be thought of as intersecting circles, with a shared area linking
them. Otherwise known as "intersecting managerial jurisprudence," it forms a unifying theme
for the corporate counsel's total learning.
Some current advances in behavior and policy sciences affect the counsel's role. For that
matter, the corporate lawyer reviews the globalization process, including the resulting
strategic repositioning that the firms he provides counsel for are required to make, and the
need to think about a corporation's; strategy at multiple levels. The salience of the nation-
state is being reduced as firms deal both with global multinational entities and
simultaneously with sub-national governmental units. Firms increasingly collaborate not only
with public entities but with each other — often with those who are competitors in other
arenas.
Also, the nature of the lawyer's participation in decision-making within the corporation is
rapidly changing. The modem corporate lawyer has gained a new role as a stakeholder — in
some cases participating in the organization and operations of governance through
participation on boards and other decision-making roles. Often these new patterns develop
alongside existing legal institutions and laws are perceived as barriers. These trends are
complicated as corporations organize for global operations. ( Emphasis supplied)
The practising lawyer of today is familiar as well with governmental policies toward the
promotion and management of technology. New collaborative arrangements for promoting
specific technologies or competitiveness more generally require approaches from industry
that differ from older, more adversarial relationships and traditional forms of seeking to
influence governmental policies. And there are lessons to be learned from other countries. In
Europe, Esprit, Eureka and Race are examples of collaborative efforts between governmental
and business Japan's MITI is world famous. (Emphasis supplied)

6. Following the concept of boundary spanning, the office of the Corporate Counsel comprises a
distinct group within the managerial structure of all kinds of organizations. Effectiveness of
both long-term and temporary groups within organizations has been found to be related to
indentifiable factors in the group-context interaction such as the groups actively revising their
knowledge of the environment coordinating work with outsiders, promoting team
achievements within the organization. In general, such external activities are better
predictors of team performance than internal group processes.
In a crisis situation, the legal managerial capabilities of the corporate lawyer vis-a-vis the
managerial mettle of corporations are challenged. Current research is seeking ways both to
anticipate effective managerial procedures and to understand relationships of financial
liability and insurance considerations. (Emphasis supplied)
Regarding the skills to apply by the corporate counsel, three factors are apropos:
First System Dynamics. The field of systems dynamics has been found an effective tool for
new managerial thinking regarding both planning and pressing immediate problems. An
understanding of the role of feedback loops, inventory levels, and rates of flow, enable users
to simulate all sorts of systematic problems — physical, economic, managerial, social, and
psychological. New programming techniques now make the system dynamics principles more
accessible to managers — including corporate counsels. (Emphasis supplied)
Second Decision Analysis. This enables users to make better decisions involving complexity
and uncertainty. In the context of a law department, it can be used to appraise the settlement
value of litigation, aid in negotiation settlement, and minimize the cost and risk involved in
managing a portfolio of cases. (Emphasis supplied)
Third Modeling for Negotiation Management. Computer-based models can be used directly
by parties and mediators in all lands of negotiations. All integrated set of such tools provide
coherent and effective negotiation support, including hands-on on instruction in these
techniques. A simulation case of an international joint venture may be used to illustrate the
point.
[Be this as it may,] the organization and management of the legal function, concern three
pointed areas of consideration, thus:
Preventive Lawyering. Planning by lawyers requires special skills that comprise a major part of
the general counsel's responsibilities. They differ from those of remedial law. Preventive
lawyering is concerned with minimizing the risks of legal trouble and maximizing legal rights
for such legal entities at that time when transactional or similar facts are being considered
and made.
Managerial Jurisprudence. This is the framework within which are undertaken those activities
of the firm to which legal consequences attach. It needs to be directly supportive of this
nation's evolving economic and organizational fabric as firms change to stay competitive in a
global, interdependent environment. The practice and theory of "law" is not adequate today
to facilitate the relationships needed in trying to make a global economy work.
Organization and Functioning of the Corporate Counsel's Office. The general counsel has
emerged in the last decade as one of the most vibrant subsets of the legal profession. The
corporate counsel hear responsibility for key aspects of the firm's strategic issues, including
structuring its global operations, managing improved relationships with an increasingly
diversified body of employees, managing expanded liability exposure, creating new and
varied interactions with public decision-makers, coping internally with more complex make or
by decisions.
This whole exercise drives home the thesis that knowing corporate law is not enough to make
one a good general corporate counsel nor to give him a full sense of how the legal system
shapes corporate activities. And even if the corporate lawyer's aim is not the understand all
of the law's effects on corporate activities, he must, at the very least, also gain a working
knowledge of the management issues if only to be able to grasp not only the basic legal
"constitution' or makeup of the modem corporation. "Business Star", "The Corporate
Counsel," April 10, 1991, p. 4).
The challenge for lawyers (both of the bar and the bench) is to have more than a passing
knowledge of financial law affecting each aspect of their work. Yet, many would admit to
ignorance of vast tracts of the financial law territory. What transpires next is a dilemma of
professional security: Will the lawyer admit ignorance and risk opprobrium?; or will he feign
understanding and risk exposure? (Business Star, "Corporate Finance law," Jan. 11, 1989, p.
4).
Respondent Christian Monsod was nominated by President Corazon C. Aquino to the position of
Chairman of the COMELEC in a letter received by the Secretariat of the Commission on
Appointments on April 25, 1991. Petitioner opposed the nomination because allegedly Monsod
does not possess the required qualification of having been engaged in the practice of law for at
least ten years.
On June 5, 1991, the Commission on Appointments confirmed the nomination of Monsod as
Chairman of the COMELEC. On June 18, 1991, he took his oath of office. On the same day, he
assumed office as Chairman of the COMELEC.
Challenging the validity of the confirmation by the Commission on Appointments of Monsod's
nomination, petitioner as a citizen and taxpayer, filed the instant petition for certiorari and
Prohibition praying that said confirmation and the consequent appointment of Monsod as
Chairman of the Commission on Elections be declared null and void.
Atty. Christian Monsod is a member of the Philippine Bar, having passed the bar examinations of
1960 with a grade of 86-55%. He has been a dues paying member of the Integrated Bar of the
Philippines since its inception in 1972-73. He has also been paying his professional license fees as
lawyer for more than ten years. (p. 124, Rollo)
After graduating from the College of Law (U.P.) and having hurdled the bar, Atty. Monsod worked
in the law office of his father. During his stint in the World Bank Group (1963-1970), Monsod
worked as an operations officer for about two years in Costa Rica and Panama, which involved
getting acquainted with the laws of member-countries negotiating loans and coordinating legal,
economic, and project work of the Bank. Upon returning to the Philippines in 1970, he worked with
the Meralco Group, served as chief executive officer of an investment bank and subsequently of a

7. business conglomerate, and since 1986, has rendered services to various companies as a legal and
economic consultant or chief executive officer. As former Secretary-General (1986) and National
Chairman (1987) of NAMFREL. Monsod's work involved being knowledgeable in election law. He
appeared for NAMFREL in its accreditation hearings before the Comelec. In the field of advocacy,
Monsod, in his personal capacity and as former Co-Chairman of the Bishops Businessmen's
Conference for Human Development, has worked with the under privileged sectors, such as the
farmer and urban poor groups, in initiating, lobbying for and engaging in affirmative action for the
agrarian reform law and lately the urban land reform bill. Monsod also made use of his legal
knowledge as a member of the Davide Commission, a quast judicial body, which conducted
numerous hearings (1990) and as a member of the Constitutional Commission (1986-1987), and
Chairman of its Committee on Accountability of Public Officers, for which he was cited by the
President of the Commission, Justice Cecilia Muñoz-Palma for "innumerable amendments to
reconcile government functions with individual freedoms and public accountability and the party-
list system for the House of Representative. (pp. 128-129 Rollo) ( Emphasis supplied)
Just a word about the work of a negotiating team of which Atty. Monsod used to be a member.
In a loan agreement, for instance, a negotiating panel acts as a team, and which is adequately
constituted to meet the various contingencies that arise during a negotiation. Besides top
officials of the Borrower concerned, there are the legal officer (such as the legal counsel), the
finance manager, and an operations officer (such as an official involved in negotiating the
contracts) who comprise the members of the team. (Guillermo V. Soliven, "Loan Negotiating
Strategies for Developing Country Borrowers," Staff Paper No. 2, Central Bank of the
Philippines, Manila, 1982, p. 11). (Emphasis supplied)
After a fashion, the loan agreement is like a country's Constitution; it lays down the law as far
as the loan transaction is concerned. Thus, the meat of any Loan Agreement can be
compartmentalized into five (5) fundamental parts: (1) business terms; (2) borrower's
representation; (3) conditions of closing; (4) covenants; and (5) events of default. (Ibid., p.
13).
In the same vein, lawyers play an important role in any debt restructuring program. For aside
from performing the tasks of legislative drafting and legal advising, they score national
development policies as key factors in maintaining their countries' sovereignty. (Condensed
from the work paper, entitled "Wanted: Development Lawyers for Developing Nations,"
submitted by L. Michael Hager, regional legal adviser of the United States Agency for
International Development, during the Session on Law for the Development of Nations at the
Abidjan World Conference in Ivory Coast, sponsored by the World Peace Through Law Center
on August 26-31, 1973). ( Emphasis supplied)
Loan concessions and compromises, perhaps even more so than purely renegotiation policies,
demand expertise in the law of contracts, in legislation and agreement drafting and in
renegotiation. Necessarily, a sovereign lawyer may work with an international business
specialist or an economist in the formulation of a model loan agreement. Debt restructuring
contract agreements contain such a mixture of technical language that they should be
carefully drafted and signed only with the advise of competent counsel in conjunction with
the guidance of adequate technical support personnel. (See International Law Aspects of the
Philippine External Debts, an unpublished dissertation, U.S.T. Graduate School of Law, 1987,
p. 321). ( Emphasis supplied)
A critical aspect of sovereign debt restructuring/contract construction is the set of terms and
conditions which determines the contractual remedies for a failure to perform one or more
elements of the contract. A good agreement must not only define the responsibilities of both
parties, but must also state the recourse open to either party when the other fails to
discharge an obligation. For a compleat debt restructuring represents a devotion to that
principle which in the ultimate analysis is sine qua non for foreign loan agreements-an
adherence to the rule of law in domestic and international affairs of whose kind U.S. Supreme
Court Justice Oliver Wendell Holmes, Jr. once said: "They carry no banners, they beat no
drums; but where they are, men learn that bustle and bush are not the equal of quiet genius
and serene mastery." (See Ricardo J. Romulo, "The Role of Lawyers in Foreign Investments,"
Integrated Bar of the Philippine Journal, Vol. 15, Nos. 3 and 4, Third and Fourth Quarters,
1977, p. 265).
Interpreted in the light of the various definitions of the term Practice of law". particularly the
modern concept of law practice, and taking into consideration the liberal construction intended by
the framers of the Constitution, Atty. Monsod's past work experiences as a lawyer-economist, a
lawyer-manager, a lawyer-entrepreneur of industry, a lawyer-negotiator of contracts, and a
lawyer-legislator of both the rich and the poor — verily more than satisfy the constitutional
requirement — that he has been engaged in the practice of law for at least ten years.
Besides in the leading case of Luego v. Civil Service Commission, 143 SCRA 327, the Court said:
Appointment is an essentially discretionary power and must be performed by the officer in
which it is vested according to his best lights, the only condition being that the appointee
should possess the qualifications required by law. If he does, then the appointment cannot
be faulted on the ground that there are others better qualified who should have been
preferred. This is a political question involving considerations of wisdom which only the
appointing authority can decide. (emphasis supplied)
No less emphatic was the Court in the case of (Central Bank v. Civil Service Commission, 171 SCRA
744) where it stated:
It is well-settled that when the appointee is qualified, as in this case, and all the other legal
requirements are satisfied, the Commission has no alternative but to attest to the
appointment in accordance with the Civil Service Law. The Commission has no authority to
revoke an appointment on the ground that another person is more qualified for a particular
position. It also has no authority to direct the appointment of a substitute of its choice. To do
so would be an encroachment on the discretion vested upon the appointing authority. An
appointment is essentially within the discretionary power of whomsoever it is vested, subject
to the only condition that the appointee should possess the qualifications required by law.
( Emphasis supplied)
The appointing process in a regular appointment as in the case at bar, consists of four (4) stages:
(1) nomination; (2) confirmation by the Commission on Appointments; (3) issuance of a
commission (in the Philippines, upon submission by the Commission on Appointments of its
certificate of confirmation, the President issues the permanent appointment; and (4) acceptance
e.g., oath-taking, posting of bond, etc. . . . (Lacson v. Romero, No. L-3081, October 14, 1949;
Gonzales, Law on Public Officers, p. 200)

8. The power of the Commission on Appointments to give its consent to the nomination of Monsod
as Chairman of the Commission on Elections is mandated by Section 1(2) Sub-Article C, Article IX of
the Constitution which provides:
The Chairman and the Commisioners shall be appointed by the President with the consent of
the Commission on Appointments for a term of seven years without reappointment. Of those
first appointed, three Members shall hold office for seven years, two Members for five years,
and the last Members for three years, without reappointment. Appointment to any vacancy
shall be only for the unexpired term of the predecessor. In no case shall any Member be
appointed or designated in a temporary or acting capacity.
Anent Justice Teodoro Padilla's separate opinion, suffice it to say that his definition of the
practice of law is the traditional or stereotyped notion of law practice, as distinguished
from the modern concept of the practice of law, which modern connotation is exactly what
was intended by the eminent framers of the 1987 Constitution. Moreover, Justice Padilla's
definition would require generally a habitual law practice, perhaps practised two or three
times a week and would outlaw say, law practice once or twice a year for ten consecutive
years. Clearly, this is far from the constitutional intent.
Upon the other hand, the separate opinion of Justice Isagani Cruz states that in my written
opinion, I made use of a definition of law practice which really means nothing because the
definition says that law practice " . . . is what people ordinarily mean by the practice of law." True I
cited the definition but only by way of sarcasm as evident from my statement that the definition of
law practice by "traditional areas of law practice is essentially tautologous" or defining a phrase by
means of the phrase itself that is being defined.
Justice Cruz goes on to say in substance that since the law covers almost all situations, most
individuals, in making use of the law, or in advising others on what the law means, are actually
practicing law. In that sense, perhaps, but we should not lose sight of the fact that Mr. Monsod
is a lawyer, a member of the Philippine Bar, who has been practising law for over ten years. This is
different from the acts of persons practising law, without first becoming lawyers.
Justice Cruz also says that the Supreme Court can even disqualify an elected President of the
Philippines, say, on the ground that he lacks one or more qualifications. This matter, I greatly
doubt. For one thing, how can an action or petition be brought against the President? And even
assuming that he is indeed disqualified, how can the action be entertained since he is the
incumbent President?
We now proceed:
The Commission on the basis of evidence submitted doling the public hearings on Monsod's
confirmation, implicitly determined that he possessed the necessary qualifications as required by
law. The judgment rendered by the Commission in the exercise of such an acknowledged power is
beyond judicial interference except only upon a clear showing of a grave abuse of discretion
amounting to lack or excess of jurisdiction. (Art. VIII, Sec. 1 Constitution). Thus, only where such
grave abuse of discretion is clearly shown shall the Court interfere with the Commission's
judgment. In the instant case, there is no occasion for the exercise of the Court's corrective power,
since no abuse, much less a grave abuse of discretion, that would amount to lack or excess of
jurisdiction and would warrant the issuance of the writs prayed, for has been clearly shown.
Additionally, consider the following:
(1) If the Commission on Appointments rejects a nominee by the President,
may the Supreme Court reverse the Commission, and thus in
effect confirm the appointment? Clearly, the answer is in the negative.
(2) In the same vein, may the Court reject the nominee, whom the
Commission has confirmed? The answer is likewise clear.
(3) If the United States Senate (which is the confirming body in the U.S.
Congress) decides to confirma Presidential nominee, it would be incredible
that the U.S. Supreme Court would still reverse the U.S. Senate.
Finally, one significant legal maxim is:
We must interpret not by the letter that killeth, but by the spirit that giveth
life.
Take this hypothetical case of Samson and Delilah. Once, the procurator of Judea asked Delilah
(who was Samson's beloved) for help in capturing Samson. Delilah agreed on condition that —
No blade shall touch his skin;
No blood shall flow from his veins.
When Samson (his long hair cut by Delilah) was captured, the procurator placed an iron rod
burning white-hot two or three inches away from in front of Samson's eyes. This blinded the man.
Upon hearing of what had happened to her beloved, Delilah was beside herself with anger, and
fuming with righteous fury, accused the procurator of reneging on his word. The procurator calmly
replied: "Did any blade touch his skin? Did any blood flow from his veins?" The procurator was
clearly relying on the letter, not the spirit of the agreement.
In view of the foregoing, this petition is hereby DISMISSED.
SO ORDERED.

9. EN BANC
G.R. No. 159139 January 13, 2004
INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, MA. CORAZON M. AKOL, MIGUEL UY,
EDUARDO H. LOPEZ, AUGUSTO C. LAGMAN, REX C. DRILON, MIGUEL HILADO, LEY SALCEDO, and
MANUEL ALCUAZ JR., petitioners,
vs.
COMMISSION ON ELECTIONS; COMELEC CHAIRMAN BENJAMIN ABALOS SR.; COMELEC BIDDING and
AWARD COMMITTEE CHAIRMAN EDUARDO D. MEJOS and MEMBERS GIDEON DE GUZMAN, JOSE F.
BALBUENA, LAMBERTO P. LLAMAS, and BARTOLOME SINOCRUZ JR.; MEGA PACIFIC eSOLUTIONS, INC.;
and MEGA PACIFIC CONSORTIUM, respondents.
D E C I S I O N
PANGANIBAN, J.:
There is grave abuse of discretion (1) when an act is done contrary to the Constitution, the law or
jurisprudence;1
or (2) when it is executed whimsically, capriciously or arbitrarily out of malice, ill
will or personal bias.2
In the present case, the Commission on Elections approved the assailed
Resolution and awarded the subject Contract not only in clear violation of law and jurisprudence,
but also in reckless disregard of its own bidding rules and procedure. For the automation of the
counting and canvassing of the ballots in the 2004 elections, Comelec awarded the Contract to
"Mega Pacific Consortium" an entity that had not participated in the bidding. Despite this grant,
the poll body signed the actual automation Contract with "Mega Pacific eSolutions, Inc.," a
company that joined the bidding but had not met the eligibility requirements.
Comelec awarded this billion-peso undertaking with inexplicable haste, without adequately
checking and observing mandatory financial, technical and legal requirements. It also accepted the
proferred computer hardware and software even if, at the time of the award, they had undeniably
failed to pass eight critical requirements designed to safeguard the integrity of elections, especially
the following three items:
· They failed to achieve the accuracy rating criteria of 99.9995 percent set-up by the
Comelec itself
· They were not able to detect previously downloaded results at various canvassing or
consolidation levels and to prevent these from being inputted again
· They were unable to print the statutorily required audit trails of the count/canvass at
different levels without any loss of data
Because of the foregoing violations of law and the glaring grave abuse of discretion committed by
Comelec, the Court has no choice but to exercise its solemn "constitutional duty"3
to void the
assailed Resolution and the subject Contract. The illegal, imprudent and hasty actions of the
Commission have not only desecrated legal and jurisprudential norms, but have also cast serious
doubts upon the poll body’s ability and capacity to conduct automated elections. Truly, the pith
and soul of democracy -- credible, orderly, and peaceful elections -- has been put in jeopardy by
the illegal and gravely abusive acts of Comelec.

10. The Case
Before us is a Petition4
under Rule 65 of the Rules of Court, seeking (1) to declare null and void
Resolution No. 6074 of the Commission on Elections (Comelec), which awarded "Phase II of the
Modernization Project of the Commission to Mega Pacific Consortium (MPC);" (2) to enjoin the
implementation of any further contract that may have been entered into by Comelec "either with
Mega Pacific Consortium and/or Mega Pacific eSolutions, Inc. (MPEI);" and (3) to compel Comelec
to conduct a re-bidding of the project.
The Facts
The following facts are not disputed. They were culled from official documents, the parties’
pleadings, as well as from admissions during the Oral Argument on October 7, 2003.
On June 7, 1995, Congress passed Republic Act 8046,5
which authorized Comelec to conduct a
nationwide demonstration of a computerized election system and allowed the poll body to pilot-
test the system in the March 1996 elections in the Autonomous Region in Muslim Mindanao
(ARMM).
On December 22, 1997, Congress enacted Republic Act 84366
authorizing Comelec to use an
automated election system (AES) for the process of voting, counting votes and
canvassing/consolidating the results of the national and local elections. It also mandated the poll
body to acquire automated counting machines (ACMs), computer equipment, devices and
materials; and to adopt new electoral forms and printing materials.
Initially intending to implement the automation during the May 11, 1998 presidential elections,
Comelec -- in its Resolution No. 2985 dated February 9, 19987
-- eventually decided against full
national implementation and limited the automation to the Autonomous Region in Muslim
Mindanao (ARMM). However, due to the failure of the machines to read correctly some
automated ballots in one town, the poll body later ordered their manual count for the entire
Province of Sulu.8
In the May 2001 elections, the counting and canvassing of votes for both national and local
positions were also done manually, as no additional ACMs had been acquired for that electoral
exercise allegedly because of time constraints.
On October 29, 2002, Comelec adopted in its Resolution 02-0170 a modernization program for the
2004 elections. It resolved to conduct biddings for the three (3) phases of its Automated Election
System; namely, Phase I - Voter Registration and Validation System; Phase II - Automated Counting
and Canvassing System; and Phase III - Electronic Transmission.
On January 24, 2003, President Gloria Macapagal-Arroyo issued Executive Order No. 172, which
allocated the sum of P2.5 billion to fund the AES for the May 10, 2004 elections. Upon the request
of Comelec, she authorized the release of an additional P500 million.
On January 28, 2003, the Commission issued an "Invitation to Apply for Eligibility and to Bid,"
which we quote as follows:
"INVITATION TO APPLY FOR ELIGIBILITY AND TO BID
The Commission on Elections (COMELEC), pursuant to the mandate of Republic Act Nos.
8189 and 8436, invites interested offerors, vendors, suppliers or lessors to apply for
eligibility and to bid for the procurement by purchase, lease, lease with option to
purchase, or otherwise, supplies, equipment, materials and services needed for a
comprehensive Automated Election System, consisting of three (3) phases: (a)
registration/verification of voters, (b) automated counting and consolidation of votes,
and (c) electronic transmission of election results, with an approved budget of TWO
BILLION FIVE HUNDRED MILLION (Php2,500,000,000) Pesos.
Only bids from the following entities shall be entertained:
a. Duly licensed Filipino citizens/proprietorships;
b. Partnerships duly organized under the laws of the Philippines and of which at least sixty percent
(60%) of the interest belongs to citizens of the Philippines;
c. Corporations duly organized under the laws of the Philippines, and of which at least sixty
percent (60%) of the outstanding capital stock belongs to citizens of the Philippines;
d. Manufacturers, suppliers and/or distributors forming themselves into a joint venture, i.e., a
group of two (2) or more manufacturers, suppliers and/or distributors that intend to be jointly and
severally responsible or liable for a particular contract, provided that Filipino ownership thereof
shall be at least sixty percent (60%); and
e. Cooperatives duly registered with the Cooperatives Development Authority.
Bid documents for the three (3) phases may be obtained starting 10 February 2003, during
office hours from the Bids and Awards Committee (BAC) Secretariat/Office of Commissioner
Resurreccion Z. Borra, 7th Floor, Palacio del Governador, Intramuros, Manila, upon payment
at the Cash Division, Commission on Elections, in cash or cashier’s check, payable to the
Commission on Elections, of a non-refundable amount of FIFTEEN THOUSAND PESOS
(Php15,000.00) for each phase. For this purpose, interested offerors, vendors, suppliers or
lessors have the option to participate in any or all of the three (3) phases of the
comprehensive Automated Election System.
A Pre-Bid Conference is scheduled on 13 February 2003, at 9:00 a.m. at the Session Hall,
Commission on Elections, Postigo Street, Intramuros, Manila. Should there be questions on
the bid documents, bidders are required to submit their queries in writing to the BAC
Secretariat prior to the scheduled Pre-Bid Conference.
Deadline for submission to the BAC of applications for eligibility and bid envelopes for the
supply of the comprehensive Automated Election System shall be at the Session Hall,
Commission on Elections, Postigo Street, Intramuros, Manila on 28 February 2003 at 9:00
a.m.
The COMELEC reserves the right to review the qualifications of the bidders after the bidding
and before the contract is executed. Should such review uncover any misrepresentation
made in the eligibility statements, or any changes in the situation of the bidder to materially
downgrade the substance of such statements, the COMELEC shall disqualify the bidder upon
due notice without any obligation whatsoever for any expenses or losses that may be
incurred by it in the preparation of its bid."9

11. On February 11, 2003, Comelec issued Resolution No. 5929 clarifying certain eligibility criteria for
bidders and the schedule of activities for the project bidding, as follows:
"1.) Open to Filipino and foreign corporation duly registered and licensed to
do business and is actually doing business in the Philippines, subject to Sec. 43 of RA 9184 (An Act
providing In the Modernization Standardization and Regulation of the Procurement Activities of the
Government and for other purposes etc.)
2.) Track Record:
a) For counting machines – should have been used in at least one (1) political exercise with no less than
Twenty Million Voters;
b) For verification of voters – the reference site of an existing data base installation using Automated
Fingerprint Identification System (AFIS) with at least Twenty Million.
3.) Ten percent (10%) equity requirement shall be based on the total project cost; and
4.) Performance bond shall be twenty percent (20%) of the bid offer.
RESOLVED moreover, that:
1) A. Due to the decision that the eligibility requirements and the rest of the Bid documents shall
be released at the same time, and the memorandum of Comm. Resurreccion Z. Borra dated
February 7, 2003, the documents to be released on Friday, February 14, 2003 at 2:00 o’clock p.m.
shall be the eligibility criteria, Terms of Reference (TOR) and other pertinent documents;
B. Pre-Bid conference shall be on February 18, 2003; and
C. Deadline for the submission and receipt of the Bids shall be on March 5, 2003.
2) The aforementioned documents will be available at the following offices:
a) Voters Validation: Office of Comm. Javier
b) Automated Counting Machines: Office of Comm. Borra
c) Electronic Transmission: Office of Comm. Tancangco"10
On February 17, 2003, the poll body released the Request for Proposal (RFP) to procure the
election automation machines. The Bids and Awards Committee (BAC) of Comelec convened a pre-
bid conference on February 18, 2003 and gave prospective bidders until March 10, 2003 to submit
their respective bids.
Among others, the RFP provided that bids from manufacturers, suppliers and/or distributors
forming themselves into a joint venture may be entertained, provided that the Philippine
ownership thereof shall be at least 60 percent.Joint venture is defined in the RFP as "a group of
two or more manufacturers, suppliers and/or distributors that intend to be jointly and severally
responsible or liable for a particular contract."11
Basically, the public bidding was to be conducted under a two-envelope/two stage system. The
bidder’s first envelope or the Eligibility Envelope should establish the bidder’s eligibility to bid and
its qualifications to perform the acts if accepted. On the other hand, the second envelope would
be the Bid Envelope itself. The RFP outlines the bidding procedures as follows:
"25. Determination of Eligibility of Prospective Bidders
"25.1 The eligibility envelopes of prospective Bidders shall be opened first to determine their
eligibility. In case any of the requirements specified in Clause 20 is missing from the first bid
envelope, the BAC shall declare said prospective Bidder as ineligible to bid. Bid envelopes of
ineligible Bidders shall be immediately returned unopened.
"25.2 The eligibility of prospective Bidders shall be determined using simple ‘pass/fail’ criteria
and shall be determined as either eligible or ineligible. If the prospective Bidder is rated
‘passed’ for all the legal, technical and financial requirements, he shall be considered eligible.
If the prospective Bidder is rated ‘failed’ in any of the requirements, he shall be considered
ineligible.
"26. Bid Examination/Evaluation
"26.1 The BAC will examine the Bids to determine whether they are complete, whether any
computational errors have been made, whether required securities have been furnished,
whether the documents have been properly signed, and whether the Bids are generally in
order.
"26.2 The BAC shall check the submitted documents of each Bidder against the required
documents enumerated under Clause 20, to ascertain if they are all present in the Second bid
envelope (Technical Envelope). In case one (1) or more of the required documents is missing,
the BAC shall rate the Bid concerned as ‘failed’ and immediately return to the Bidder its Third
bid envelope (Financial Envelope) unopened. Otherwise, the BAC shall rate the first bid
envelope as ‘passed’.
"26.3 The BAC shall immediately open the Financial Envelopes of the Bidders whose Technical
Envelopes were passed or rated on or above the passing score. Only Bids that are determined
to contain all the bid requirements for both components shall be rated ‘passed’ and shall
immediately be considered for evaluation and comparison.
"26.4 In the opening and examination of the Financial Envelope, the BAC shall announce and
tabulate the Total Bid Price as calculated. Arithmetical errors will be rectified on the following
basis: If there is a discrepancy between words and figures, the amount in words will prevail. If
there is a discrepancy between the unit price and the total price that is obtained by
multiplying the unit price and the quantity, the unit price shall prevail and the total price shall
be corrected accordingly. If there is a discrepancy between the Total Bid Price and the sum of
the total prices, the sum of the total prices prevail and the Total Bid Price shall be corrected
accordingly.
"26.5 Financial Proposals which do not clearly state the Total Bid Price shall be rejected. Also,
Total Bid Price as calculated that exceeds the approved budget for the contract shall also be
rejected.
27. Comparison of Bids
27.1 The bid price shall be deemed to embrace all costs, charges and fees associated with carrying out all
the elements of the proposed Contract, including but not limited to, license fees, freight charges and
taxes.
27.2 The BAC shall establish the calculated prices of all Bids rated ‘passed’ and rank the same in
ascending order.
x x x x x x x x x
"29. Postqualification

12. "29.1 The BAC will determine to its satisfaction whether the Bidder selected as having submitted the
lowest calculated bid is qualified to satisfactorily perform the Contract.
"29.2 The determination will take into account the Bidder’s financial, technical and production
capabilities/resources. It will be based upon an examination of the documentary evidence of the Bidder’s
qualification submitted by the Bidder as well as such other information as the BAC deems necessary and
appropriate.
"29.3 A bid determined as not substantially responsive will be rejected by the BAC and may not
subsequently be made responsive by the Bidder by correction of the non-conformity.
"29.4 The BAC may waive any informality or non-conformity or irregularity in a bid which does not
constitute a material deviation, provided such waiver does not prejudice or affect the relative ranking of
any Bidder.
"29.5 Should the BAC find that the Bidder complies with the legal, financial and technical requirements,
it shall make an affirmative determination which shall be a prerequisite for award of the Contract to the
Bidder. Otherwise, it will make a negative determination which will result in rejection of the Bidder’s bid,
in which event the BAC will proceed to the next lowest calculated bid to make a similar determination of
that Bidder’s capabilities to perform satisfactorily."12
Out of the 57 bidders,13
the BAC found MPC and the Total Information Management Corporation
(TIMC) eligible. For technical evaluation, they were referred to the BAC’s Technical Working Group
(TWG) and the Department of Science and Technology (DOST).
In its Report on the Evaluation of the Technical Proposals on Phase II, DOST said that both MPC
and TIMC had obtained a number of failed marks in the technical evaluation. Notwithstanding
these failures, Comelec en banc, on April 15, 2003, promulgated Resolution No. 6074 awarding the
project to MPC. The Commission publicized this Resolution and the award of the project to MPC
on May 16, 2003.
On May 29, 2003, five individuals and entities (including the herein Petitioners Information
Technology Foundation of the Philippines, represented by its president, Alfredo M. Torres; and
Ma. Corazon Akol) wrote a letter14
to Comelec Chairman Benjamin Abalos Sr. They protested the
award of the Contract to Respondent MPC "due to glaring irregularities in the manner in which the
bidding process had been conducted." Citing therein the noncompliance with eligibility as well as
technical and procedural requirements (many of which have been discussed at length in the
Petition), they sought a re-bidding.
In a letter-reply dated June 6, 2003,15
the Comelec chairman -- speaking through Atty. Jaime Paz,
his head executive assistant -- rejected the protest and declared that the award "would stand up
to the strictest scrutiny."
Hence, the present Petition.16
The Issues
In their Memorandum, petitioners raise the following issues for our consideration:
"1. The COMELEC awarded and contracted with a non-eligible entity; x x x
"2. Private respondents failed to pass the Technical Test as required in the RFP. Notwithstanding, such
failure was ignored. In effect, the COMELEC changed the rules after the bidding in effect changing the
nature of the contract bidded upon.
"3. Petitioners have locus standi.
"4. Instant Petition is not premature. Direct resort to the Supreme Court is justified."17
In the main, the substantive issue is whether the Commission on Elections, the agency vested with
the exclusive constitutional mandate to oversee elections, gravely abused its discretion when, in
the exercise of its administrative functions, it awarded to MPC the contract for the second phase
of the comprehensive Automated Election System.
Before discussing the validity of the award to MPC, however, we deem it proper to first pass upon
the procedural issues: the legal standing of petitioners and the alleged prematurity of the Petition.
This Court’s Ruling
The Petition is meritorious.
First Procedural Issue:
Locus Standi of Petitioners
Respondents chorus that petitioners do not possess locus standi, inasmuch as they are not
challenging the validity or constitutionality of RA 8436. Moreover, petitioners supposedly admitted
during the Oral Argument that no law had been violated by the award of the Contract.
Furthermore, they allegedly have no actual and material interest in the Contract and, hence, do
not stand to be injured or prejudiced on account of the award.
On the other hand, petitioners -- suing in their capacities as taxpayers, registered voters and
concerned citizens -- respond that the issues central to this case are "of transcendental
importance and of national interest." Allegedly, Comelec’s flawed bidding and questionable award
of the Contract to an unqualified entity would impact directly on the success or the failure of the
electoral process. Thus, any taint on the sanctity of the ballot as the expression of the will of the
people would inevitably affect their faith in the democratic system of government. Petitioners
further argue that the award of any contract for automation involves disbursement of public funds
in gargantuan amounts; therefore, public interest requires that the laws governing the transaction
must be followed strictly.
We agree with petitioners. Our nation’s political and economic future virtually hangs in the
balance, pending the outcome of the 2004 elections. Hence, there can be no serious doubt that
the subject matter of this case is "a matter of public concern and imbued with public interest"; 18
in
other words, it is of "paramount public interest"19
and "transcendental importance."20
This fact
alone would justify relaxing the rule on legal standing, following the liberal policy of this Court
whenever a case involves "an issue of overarching significance to our society."21
Petitioners’ legal
standing should therefore be recognized and upheld.
Moreover, this Court has held that taxpayers are allowed to sue when there is a claim of "illegal
disbursement of public funds,"22
or if public money is being "deflected to any improper
purpose";23
or when petitioners seek to restrain respondent from "wasting public funds through
the enforcement of an invalid or unconstitutional law."24
In the instant case, individual petitioners,
suing as taxpayers, assert a material interest in seeing to it that public funds are properly and
lawfully used. In the Petition, they claim that the bidding was defective, the winning bidder not a
qualified entity, and the award of the Contract contrary to law and regulation. Accordingly, they
seek to restrain respondents from implementing the Contract and, necessarily, from making any

13. unwarranted expenditure of public funds pursuant thereto. Thus, we hold that petitioners
possess locus standi.
Second Procedural Issue:
Alleged Prematurity Due to Non-Exhaustion of Administrative Remedies
Respondents claim that petitioners acted prematurely, since they had not first utilized the protest
mechanism available to them under RA 9184, the Government Procurement Reform Act, for the
settlement of disputes pertaining to procurement contracts.
Section 55 of RA 9184 states that protests against decisions of the Bidding and Awards Committee
in all stages of procurement may be lodged with the head of the procuring entity by filing a
verified position paper and paying a protest fee. Section 57 of the same law mandates that in no
case shall any such protest stay or delay the bidding process, but it must first be resolved before
any award is made.
On the other hand, Section 58 provides that court action may be resorted to only after the
protests contemplated by the statute shall have been completed. Cases filed in violation of this
process are to be dismissed for lack of jurisdiction. Regional trial courts shall have jurisdiction over
final decisions of the head of the procuring entity, and court actions shall be instituted pursuant to
Rule 65 of the 1997 Rules of Civil Procedure.
Respondents assert that throughout the bidding process, petitioners never questioned the BAC
Report finding MPC eligible to bid and recommending the award of the Contract to it (MPC).
According to respondents, the Report should have been appealed to the Comelc en banc, pursuant
to the aforementioned sections of RA 9184. In the absence of such appeal, the determination and
recommendation of the BAC had become final.
The Court is not persuaded.
Respondent Comelec came out with its en banc Resolution No. 6074 dated April 15, 2003,
awarding the project to Respondent MPC even before the BAC managed to issue its written report
and recommendation on April 21, 2003. Thus, how could petitioners have appealed the BAC’s
recommendation or report to the head of the procuring entity (the chairman of Comelec), when
the Comelec en banc had already approved the award of the contract to MPC even before
petitioners learned of the BAC recommendation?
It is claimed25
by Comelec that during its April 15, 2003 session, it received and approved the
verbal report and recommendation of the BAC for the award of the Contract to MPC, and that the
BAC subsequently re-affirmed its verbal report and recommendation by submitting it in writing on
April 21, 2003. Respondents insist that the law does not require that the BAC Report be in writing
before Comelec can act thereon; therefore, there is allegedly nothing irregular about the Report as
well as the en banc Resolution.
However, it is obvious that petitioners could have appealed the BAC’s report and recommendation
to the head of the procuring entity (the Comelec chair) only upon their discovery thereof, which at
the very earliest would have been on April 21, 2003, when the BAC actually put its report in writing
and finally released it. Even then, what would have been the use of protesting/appealing the
report to the Comelec chair, when by that time the Commission en banc (including the chairman
himself) had already approved the BAC Report and awarded the Contract to MPC?
And even assuming arguendo that petitioners had somehow gotten wind of the verbal BAC report
on April 15, 2003 (immediately after the en banc session), at that point the Commission en banc
had already given its approval to the BAC Report along with the award to MPC. To put it bluntly,
the Comelec en banc itself made it legally impossible for petitioners to avail themselves of the
administrative remedy that the Commission is so impiously harping on. There is no doubt that they
had not been accorded the opportunity to avail themselves of the process provided under Section
55 of RA 9184, according to which a protest against a decision of the BAC may be filed with the
head of the procuring entity. Nemo tenetur ad impossible,26
to borrow private respondents’
favorite Latin excuse.27
Some Observations on the BAC Report to the Comelec
We shall return to this issue of alleged prematurity shortly, but at this interstice, we would just
want to put forward a few observations regarding the BAC Report and the Comelec en banc’s
approval thereof.
First, Comelec contends that there was nothing unusual about the fact that the Report submitted
by the BAC came only after the former had already awarded the Contract, because the latter had
been asked to render its report and recommendation orally during the Commission’s en banc
session on April 15, 2003. Accordingly, Comelec supposedly acted upon such oral recommendation
and approved the award to MPC on the same day, following which the recommendation was
subsequently reduced into writing on April 21, 2003. While not entirely outside the realm of the
possible, this interesting and unique spiel does not speak well of the process that Comelec
supposedly went through in making a critical decision with respect to a multi-billion-peso contract.
We can imagine that anyone else standing in the shoes of the Honorable Commissioners would
have been extremely conscious of the overarching need for utter transparency. They would have
scrupulously avoided the slightest hint of impropriety, preferring to maintain an exacting regularity
in the performance of their duties, instead of trying to break a speed record in the award of multi-
billion-peso contracts. After all, between April 15 and April 21 were a mere six (6) days. Could
Comelec not have waited out six more days for the written report of the BAC, instead of rushing
pell-mell into the arms of MPC? Certainly, respondents never cared to explain the nature of the
Commission’s dire need to act immediately without awaiting the formal, written BAC Report.
In short, the Court finds it difficult to reconcile the uncommon dispatch with which Comelec acted
to approve the multi-billion-peso deal, with its claim of having been impelled by only the purest
and most noble of motives.
At any rate, as will be discussed later on, several other factors combine to lend negative credence
to Comelec’s tale.

14. Second, without necessarily ascribing any premature malice or premeditation on the part of the
Comelec officials involved, it should nevertheless be conceded that this cart-before-the-horse
maneuver (awarding of the Contract ahead of the BAC’s written report) would definitely serve as a
clever and effective way of averting and frustrating any impending protest under Section 55.
Having made the foregoing observations, we now go back to the question of exhausting
administrative remedies. Respondents may not have realized it, but the letter addressed to
Chairman Benjamin Abalos Sr. dated May 29, 200328
serves to eliminate the prematurity issue as it
was an actual written protest against the decision of the poll body to award the Contract. The
letter was signed by/for, inter alia, two of herein petitioners: the Information Technology
Foundation of the Philippines, represented by its president, Alfredo M. Torres; and Ma. Corazon
Akol.
Such letter-protest is sufficient compliance with the requirement to exhaust administrative
remedies particularly because it hews closely to the procedure outlined in Section 55 of RA 9184.
And even without that May 29, 2003 letter-protest, the Court still holds that petitioners need not
exhaust administrative remedies in the light of Paat v. Court of Appeals.29
Paat enumerates the
instances when the rule on exhaustion of administrative remedies may be disregarded, as follows:
"(1) when there is a violation of due process,
(2) when the issue involved is purely a legal question,
(3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction,
(4) when there is estoppel on the part of the administrative agency concerned,
(5) when there is irreparable injury,
(6) when the respondent is a department secretary whose acts as an alter ego of the President bears the
implied and assumed approval of the latter,
(7) when to require exhaustion of administrative remedies would be unreasonable,
(8) when it would amount to a nullification of a claim,
(9) when the subject matter is a private land in land case proceedings,
(10) when the rule does not provide a plain, speedy and adequate remedy, and
(11) when there are circumstances indicating the urgency of judicial intervention."30
The present controversy precisely falls within the exceptions listed as Nos. 7, 10 and 11: "(7) when
to require exhaustion of administrative remedies would be unreasonable; (10) when the rule does
not provide a plain, speedy and adequate remedy, and (11) when there are circumstances
indicating the urgency of judicial intervention." As already stated, Comelec itself made the
exhaustion of administrative remedies legally impossible or, at the very least, "unreasonable."
In any event, the peculiar circumstances surrounding the unconventional rendition of the BAC
Report and the precipitate awarding of the Contract by the Comelec en banc -- plus the fact that it
was racing to have its Contract with MPC implemented in time for the elections in May 2004
(barely four months away) -- have combined to bring about the urgent need for judicial
intervention, thus prompting this Court to dispense with the procedural exhaustion of
administrative remedies in this case.
Main Substantive Issue:
Validity of the Award to MPC
We come now to the meat of the controversy. Petitioners contend that the award is invalid, since
Comelec gravely abused its discretion when it did the following:
1. Awarded the Contract to MPC though it did not even participate in the bidding
2. Allowed MPEI to participate in the bidding despite its failure to meet the mandatory eligibility
requirements
3. Issued its Resolution of April 15, 2003 awarding the Contract to MPC despite the issuance by the
BAC of its Report, which formed the basis of the assailed Resolution, only on April 21, 200331
4. Awarded the Contract, notwithstanding the fact that during the bidding process, there were
violations of the mandatory requirements of RA 8436 as well as those set forth in Comelec’s own
Request for Proposal on the automated election system
5. Refused to declare a failed bidding and to conduct a re-bidding despite the failure of the bidders
to pass the technical tests conducted by the Department of Science and Technology
6. Failed to follow strictly the provisions of RA 8436 in the conduct of the bidding for the
automated counting machines
After reviewing the slew of pleadings as well as the matters raised during the Oral Argument, the
Court deems it sufficient to focus discussion on the following major areas of concern that impinge
on the issue of grave abuse of discretion:
A. Matters pertaining to the identity, existence and eligibility of MPC as a bidder
B. Failure of the automated counting machines (ACMs) to pass the DOST technical tests
C. Remedial measures and re-testings undertaken by Comelec and DOST after the award, and their effect
on the present controversy
A.
Failure to Establish the Identity, Existence and Eligibility of the Alleged Consortium as a Bidder
On the question of the identity and the existence of the real bidder, respondents insist that,
contrary to petitioners’ allegations, the bidder was not Mega Pacific eSolutions, Inc. (MPEI), which
was incorporated only on February 27, 2003, or 11 days prior to the bidding itself. Rather, the
bidder was Mega Pacific Consortium (MPC), of which MPEI was but a part. As proof thereof, they
point to the March 7, 2003 letter of intent to bid, signed by the president of MPEI allegedly for and
on behalf of MPC. They also call attention to the official receipt issued to MPC, acknowledging
payment for the bidding documents, as proof that it was the "consortium" that participated in the
bidding process.
We do not agree. The March 7, 2003 letter, signed by only one signatory -- "Willy U. Yu, President,
Mega Pacific eSolutions, Inc., (Lead Company/ Proponent) For: Mega Pacific Consortium" -- and
without any further proof, does not by itself prove the existence of the consortium. It does not
show that MPEI or its president have been duly pre-authorized by the other members of the
putative consortium to represent them, to bid on their collective behalf and, more important, to
commit them jointly and severally to the bid undertakings. The letter is purely self-serving and
uncorroborated.
Neither does an official receipt issued to MPC, acknowledging payment for the bidding documents,
constitute proof that it was the purported consortium that participated in the bidding. Such
receipts are issued by cashiers without any legally sufficient inquiry as to the real identity
orexistence of the supposed payor.

15. To assure itself properly of the due existence (as well as eligibility and qualification) of the putative
consortium, Comelec’s BAC should have examined the bidding documents submitted on behalf of
MPC. They would have easily discovered the following fatal flaws.
Two-Envelope,
Two-Stage System
As stated earlier in our factual presentation, the public bidding system designed by Comelec under
its RFP (Request for Proposal for the Automation of the 2004 Election) mandated the use of a two-
envelope, two-stage system. A bidder’s first envelope (Eligibility Envelope) was meant to establish
its eligibility to bid and its qualifications and capacity to perform the contract if its bid was
accepted, while the second envelope would be the Bid Envelope itself.
The Eligibility Envelope was to contain legal documents such as articles of incorporation, business
registrations, licenses and permits, mayor’s permit, VAT certification, and so forth; technical
documents containing documentary evidence to establish the track record of the bidder and its
technical and production capabilities to perform the contract; and financial documents, including
audited financial statements for the last three years, to establish the bidder’s financial capacity.
In the case of a consortium or joint venture desirous of participating in the bidding, it goes without
saying that the Eligibility Envelope would necessarily have to include a copy of the joint venture
agreement, the consortium agreement or memorandum of agreement -- or a business plan or
some other instrument of similar import -- establishing the due existence, composition and scope
of such aggrupation. Otherwise, how would Comelec know who it was dealing with, and whether
these parties are qualified and capable of delivering the products and services being offered for
bidding?32
In the instant case, no such instrument was submitted to Comelec during the bidding process. This
fact can be conclusively ascertained by scrutinizing the two-inch thick "Eligibility Requirements"
file submitted by Comelec last October 9, 2003, in partial compliance with this Court’s instructions
given during the Oral Argument. This file purports to replicate the eligibility documents originally
submitted to Comelec by MPEI allegedly on behalf of MPC, in connection with the bidding
conducted in March 2003. Included in the file are the incorporation papers and financial
statements of the members of the supposed consortium and certain certificates, licenses and
permits issued to them.
However, there is no sign whatsoever of any joint venture agreement, consortium agreement,
memorandum of agreement, or business plan executed among the members of the purported
consortium.
The only logical conclusion is that no such agreement was ever submitted to the Comelec for its
consideration, as part of the bidding process.
It thus follows that, prior the award of the Contract, there was no documentary or other basis for
Comelec to conclude that a consortium had actually been formed amongst MPEI, SK C&C and
WeSolv, along with Election.com and ePLDT.33
Neither was there anything to indicate the exact
relationships between and among these firms; their diverse roles, undertakings and prestations, if
any, relative to the prosecution of the project, the extent of their respective investments (if any) in
the supposed consortium or in the project; and the precise nature and extent of their respective
liabilities with respect to the contract being offered for bidding. And apart from the self-serving
letter of March 7, 2003, there was not even any indication that MPEI was the lead company duly
authorized to act on behalf of the others.
So, it necessarily follows that, during the bidding process, Comelec had no basis at all for
determining that the alleged consortium really existed and was eligible and qualified; and that the
arrangements among the members were satisfactory and sufficient to ensure delivery on the
Contract and to protect the government’s interest.
Notwithstanding such deficiencies, Comelec still deemed the "consortium" eligible to participate in
the bidding, proceeded to open its Second Envelope, and eventually awarded the bid to it, even
though -- per the Comelec’s own RFP -- the BAC should have declared the MPC ineligible to bid and
returned the Second (Bid) Envelope unopened.
Inasmuch as Comelec should not have considered MPEI et al. as comprising a consortium or joint
venture, it should not have allowed them to avail themselves of the provision in Section 5.4 (b) (i)
of the IRR for RA 6957 (the Build-Operate-Transfer Law), as amended by RA 7718. This provision
states in part that a joint venture/consortium proponent shall be evaluated based on the
individual or collective experience of the member-firms of the joint venture or consortium and of
the contractor(s) that it has engaged for the project. Parenthetically, respondents have uniformly
argued that the said IRR of RA 6957, as amended, have suppletory application to the instant case.
Hence, had the proponent MPEI been evaluated based solely on its own experience, financial and
operational track record or lack thereof, it would surely not have qualified and would have been
immediately considered ineligible to bid, as respondents readily admit.
At any rate, it is clear that Comelec gravely abused its discretion in arbitrarily failing to observe its
own rules, policies and guidelines with respect to the bidding process, thereby negating a fair,
honest and competitive bidding.
Commissioners Not Aware of Consortium
In this regard, the Court is beguiled by the statements of Commissioner Florentino Tuason Jr.,
given in open court during the Oral Argument last October 7, 2003. The good commissioner
affirmed that he was aware, of his own personal knowledge, that there had indeed been a written
agreement among the "consortium" members,34
although it was an internal matter among
them,35
and of the fact that it would be presented by counsel for private respondent.36
However, under questioning by Chief Justice Hilario G. Davide Jr. and Justice Jose C. Vitug,
Commissioner Tuason in effect admitted that, while he was the commissioner-in-charge of
Comelec’s Legal Department, he had never seen, even up to that late date, the agreement he
spoke of.37
Under further questioning, he was likewise unable to provide any information
regarding the amounts invested into the project by several members of the claimed
consortium.38
A short while later, he admitted that the Commission had not taken a look at the
agreement (if any).39

16. He tried to justify his position by claiming that he was not a member of the BAC. Neither was he
the commissioner-in-charge of the Phase II Modernization project (the automated election
system); but that, in any case, the BAC and the Phase II Modernization Project Team did look into
the aspect of the composition of the consortium.
It seems to the Court, though, that even if the BAC or the Phase II Team had taken charge of
evaluating the eligibility, qualifications and credentials of the consortium-bidder, still, in all
probability, the former would have referred the task to Commissioner Tuason, head of Comelec’s
Legal Department. That task was the appreciation and evaluation of the legal effects and
consequences of the terms, conditions, stipulations and covenants contained in any joint venture
agreement, consortium agreement or a similar document -- assuming of course that any of these
was available at the time. The fact that Commissioner Tuason was barely aware of the situation
bespeaks the complete absence of such document, or the utter failure or neglect of the Comelec
to examine it -- assuming it was available at all -- at the time the award was made on April 15,
2003.
In any event, the Court notes for the record that Commissioner Tuason basically contradicted his
statements in open court about there being one written agreement among all the consortium
members, when he subsequently referred40
to the four (4) Memoranda of Agreement (MOAs)
executed by them.41
At this juncture, one might ask: What, then, if there are four MOAs instead of one or none at all?
Isn’t it enough that there are these corporations coming together to carry out the automation
project? Isn’t it true, as respondent aver, that nowhere in the RFP issued by Comelec is it required
that the members of the joint venture execute a single written agreement to prove the existence
of a joint venture. Indeed, the intention to be jointly and severally liable may be evidenced not
only by a single joint venture agreement, but also by supplementary documents executed by the
parties signifying such intention. What then is the big deal?
The problem is not that there are four agreements instead of only one. The problem is that
Comelec never bothered to check. It never based its decision on documents or other proof that
would concretely establish the existence of the claimed consortium or joint venture or
agglomeration. It relied merely on the self-serving representation in an uncorroborated letter
signed by only one individual, claiming that his company represented a "consortium" of several
different corporations. It concluded forthwith that a consortium indeed existed, composed of such
and such members, and thereafter declared that the entity was eligible to bid.
True, copies of financial statements and incorporation papers of the alleged "consortium"
members were submitted. But these papers did not establish the existence of a consortium, as
they could have been provided by the companies concerned for purposes other than to prove that
they were part of a consortium or joint venture. For instance, the papers may have been intended
to show that those companies were each qualified to be a sub-contractor (and nothing more) in a
major project. Those documents did not by themselves support the assumption that a consortium
or joint venture existed among the companies.
In brief, despite the absence of competent proof as to the existence and eligibility of the alleged
consortium (MPC), its capacity to deliver on the Contract, and the members’ joint and several
liability therefor, Comelec nevertheless assumed that such consortium existed and was eligible. It
then went ahead and considered the bid of MPC, to which the Contract was eventually awarded,
in gross violation of the former’s own bidding rules and procedures contained in its RFP. Therein
lies Comelec’s grave abuse of discretion.
Sufficiency of the Four Agreements
Instead of one multilateral agreement executed by, and effective and binding on, all the five
"consortium members" -- as earlier claimed by Commissioner Tuason in open court -- it turns out
that what was actually executed were four (4) separate and distinct bilateral
Agreements.42
Obviously, Comelec was furnished copies of these Agreements only after the
bidding process had been terminated, as these were not included in the Eligibility Documents.
These Agreements are as follows:
· A Memorandum of Agreement between MPEI and SK C&C
· A Memorandum of Agreement between MPEI and WeSolv
· A "Teaming Agreement" between MPEI and Election.com Ltd.
· A "Teaming Agreement" between MPEI and ePLDT
In sum, each of the four different and separate bilateral Agreements is valid and binding only
between MPEI and the other contracting party, leaving the other "consortium" members total
strangers thereto. Under this setup, MPEI dealt separately with each of the "members," and the
latter (WeSolv, SK C&C, Election.com, and ePLDT) in turn had nothing to do with one another, each
dealing only with MPEI.
Respondents assert that these four Agreements were sufficient for the purpose of enabling the
corporations to still qualify (even at that late stage) as a consortium or joint venture, since the first
two Agreements had allegedly set forth the joint and several undertakings among the parties,
whereas the latter two clarified the parties’ respective roles with regard to the Project, with MPEI
being the independent contractor and Election.com and ePLDT the subcontractors.
Additionally, the use of the phrase "particular contract" in the Comelec’s Request for Proposal
(RFP), in connection with the joint and several liabilities of companies in a joint venture, is taken by
them to mean that all the members of the joint venture need not be solidarily liable for the entire
project or joint venture, because it is sufficient that the lead company and the member in charge
of a particular contract or aspect of the joint venture agree to be solidarily liable.
At this point, it must be stressed most vigorously that the submission of the four bilateral
Agreements to Comelec after the end of the bidding process did nothing to eliminate the grave
abuse of discretion it had already committed on April 15, 2003.
Deficiencies Have Not Been "Cured"
In any event, it is also claimed that the automation Contract awarded by Comelec incorporates all
documents executed by the "consortium" members, even if these documents are not referred to
therein. The basis of this assertion appears to be the passages from Section 1.4 of the Contract,
which is reproduced as follows:
"All Contract Documents shall form part of the Contract even if they or any one of them
is not referred to or mentioned in the Contract as forming a part thereof. Each of the