ARTICLE 7 SECTION 20 CASE 2 OF 3
CMMTC: Had primary and exclusive privilege and
HONTIVEROS-BARAQUEL vs. TOLL REGULATORY BOARD
IMPORTANT RULING RELATED TO THE PROVISION/DOCTRINE:
(NOT A RULING BUT LITERALLY THE ONLY THING ABOUT SEC 20)
In Constantino v Cuisia, the Court upheld the authority of the Secretary of
Finance to execute debt-relief contracts. The authority emanates from the
power of the President to contract foreign loans under ART 7 SEC 20
FACTS:
1. PD 1112: Creating the Toll Regulatory Board (TRB) to supervise and
regulate, on behalf of the govt, the collection of toll fees and operation
of toll facilities by the private sector
2. PD 1113: granting Phil. Natl Construction Co (PNCC) the right,
privilege, and authority to construct, operate, and maintain toll
facilities in North and South Luzon Toll Expressways for 30 yrs
3. Toll Operation Agreement: TRB + PNCC for operating conditions
4. PD 1894: amended PD 1113 adding Metro Manila Expressway (MME)
a. 30 yrs commencing from date of completion of PD 1113 proj
5. PNCC entered into agreement with PT Citra Lamtoro Gung Persada
(CITRA), ltd organized and established under laws of Indonesia
a. CITRA: to provide PNCC with pre-feasibility study for MME
b. Feb 1994: agreement supplemented to provide preliminary
feasibility study on Metro Manila Skyways (MMS) project
6. Second Agreement: CITRA committed to finance and undertake
prep, updating, and revalidation of previous studies on construction,
operation, and maintenance of MME and MMS projects
a. Joint Investment Proposal (JIP): result of studies, submitted
by PNCC + CITRA through TRB (who approved JIP)
i. Implementation schedule for financing, design, and
construction of MMS in THREE STAGES
1. South MMS
2. North MMS
3. Central MMS
7. Business and Joint Venture Agreement: PNCC + CITRA creating
Citra Metro MNL Tollways Corp (CMMTC), channel through which
CITRA shall participate in construction and devt of the project
8. Supplemental Toll Operation Agreement (STOA): by Philippines
(thru TRB) as grantor and CMMTC as investor (Aug 1995)
a.
responsibility of design and construction of project roads
b. PNCC Skyway Corp (PSC), subsidiary of PNCC which
undertook and performed latters obligations under STOA
i. Had primary and exclusive privilege and
responsibility of operation and maintenance
c. Stage 1 of South MMS completed and now under PNC
9. Amendment to Supplemental Toll Operation Agreement (ASTOA):
incorporated amendments, revisions, and modifications necessary to
cover design and construction of Stage 2 of South MMS (July 2007)
a. Skyway O & M Corp (SOMCO): replaced PNC
b. ASTOA approved by DOTC Sec Leandro Mendoza
c. NOTE: this is where problems on case start
10. Memo of Agreement (MOA): PNCC +PSC + CMMTC for SOMCOs
assumption of operations/maintenance of Stage 1 of South MMS
a. Toll Operation Certificate (TOC): issued by TRB to SOMCO
for operation and maintenance effective Dec 31, 2007
11. PNCC Traffic Mgt & Security Dept Workers Org (PTMSDWO): filed
Notice of Strike against PSC for unfair labor practice (union busting)
a. Sec of DOLE assumed jurisdiction (initial hearing Jan 2, 2008)
12. RTC Complaint: by PTMSDWO + PCSEU (union) against TRB +
PNCC + PSC + CMMT + SOMCO (omfg anuna daming abbrevi8)
a. Sought to prohibit implementation of ASTOA and MOA as
well as the assumption of toll operations by SOMCO
b. Alleged contrary to law
i. Did not indicate conditions that shall be imposed
ii. None of the reqs on public bidding, negotiations, or
publication complied with before issuance of TOC
iii. SOMCO not qualified as facility operator (applying
grandfather rule)
iv. No public notices or hearings conducted after transfer
v. DOTC approval could not take place of pres approval
required under PD 1113 + PD 1894 re PNCC franchise
c. Also alleged grossly disadvantageous to govt
i. With capital investment of P2.5M, SOMCO stands to
earn P400M gross revenue
ii. SOMCO would not be able to cover direct overhead
for personal services in amt of P226M
iii. Net revenue would go to private shareholders
iv. Poor delivery of toll services (no proven track record)
 v. PSC only received P320M as settlement for transfer
d. Amended Complaint: addtl prayer that PSC be allowed to
continue toll operations (TRB only one w/o Opposition filed)
13. RTC denied petition
a. RA 8975: lower courts are prohibited from issuing TRO or
preliminary injunction against the govt (or any entity acting
under govt direction) to restrain execution, implementation,
or operation of any such contract or project
b. Could no longer issue same since act sought to be restrained
already consummated Dec 31, 2007 (petition was Jan 2008)
ISSUES:
1. Procedural Issues:
a. W/N petitioners have legal standing Unions do but not legis
b. W/N petitioners are guilty of forum shopping NO
2. Substantive Issues:
a. W/N TRB has power to grant auth. to operate toll facility YES
b. W/N TOC to SOMCO valid YES
c. W/N approval of ASTOA by DOTC Sec valid YES
d. W/N assumption of toll ops disadvantageous to govt NO
RULING:
1. PSCEU + PTMSDWO have legal standing but not legislators
a. Re: Legislators
i. Standing only if unmistakable showing that
challenged official act affects/impairs
rights/prerogatives as legislators
ii. Petitioners allege that issuance of TOC infringes on
power of Congress who has sole authority to grant
franchise for operation of public utilities, but they
only do if law specifically requires franchise.
A. Raises no issue of constitutional import
b. Re: Labor unions PSCEU + PTMSDWO
i. Filed as peoples organizations invested with a
public duty to defend the rule of law
ii. Existence of unions would terminate with dissolution
of its employer and separation of its members
A. Right to self-preservation
2. Two cases are distinct and dissimilar in nature and character
a. Vexation + possibility of conflicting decisions: pivotal in FS
b. ELEMENTS OF FORUM SHOPPING:
i. Identity of parties or at least such parties that
represent the same interests in both actions
ii. Identity of rights asserted and relief prayed for, the
relief founded on the same facts
iii. Identity of 2 preceding particulars, that any judgment
rendered in one action will amount to res judicata
c. NOTICE OF STRIKE v RT COMPLAINT
i. Unfair labor practice involving right to self-organize
ii. Unconstitutional, contrary to law, disadv to govt
3. TRB, by explicit provision, given power to grant administrative
franchise for toll facility projects
a. FRANCISCO JR v TRB: abundantly clear that PD 1112 SEC
3(a) + (e) in re to PD 1894 SEC 4 have invested in TRB with
sufficient power to grant a qualified person or entity with
authority to construct, maintain and operate a toll facility and
to issue the corresponding toll operating permit or TOC
b. Re: FRANCHISE FOR TOLL OPERATIONS TO PNCC
i. Nothing in PD 1113 or PD 1894 that states that
franchise granted to PNCC is exclusion of all others
ii. Operation and maintenance of project roads were
primary and exclusive privilege and responsibility of
PNCC thru PSC under STOA and not law
A. Just decided differently in ASTOA
iii. TRB empowered to modify, amend and impose
addtl conditions on franchise of PNCC in an
appropriate contract, particularly when public
interest calls for it (PD 1113 SEC 3 + PD 1894 SEC 6)
4. Impliedly written into every TOC are the conditions prescribed
a. Pets allege conditions provided under PD 1112 SEC 3(e) not
imposed on SOMCO because they do not appear on TOC
i. TOC subject to govts control insofar as grant affects
or concerns the public, subject to terms, conditions,
and limitations under existing laws and agreements
b. FRANCISCO CASE: no need for public bidding in choosing
partners as such process was done in the exercise of mgt
prerogatives and in pursuit of its right of delectur personae.
 i. PNCC (franchisee) merely exercised mgt prerogative
when it decided to undertake construction, operation, 6. Failed to show that transfer of toll operations to SOMCO was
and maintenance of roads through companies which GROSSLY disadvantageous to the govt
are products of joint ventures with chosen partners
c. Public notice and public hearing also unnecessary concerning NOTE RE LOWER COURT JURISDICTION (RA 8975):
matters within its prerogative RA 8975 does not bar lower courts from assuming jurisdiction over
d. Re: NATIONALITY REQ FOR CORP (grandfather rule) complaints that seek nullification or implementation of natl govt
i. Lack of evidence; only aver in petition that 40% of infrastructure projects as ultimate relief (:. within RTC jurisdiction)
SOMCO is owned by CMMTC, a foreign company, WRONG FOR PETITIONERS TO COME DIRECTLY BEFORE SC FOR
while the rest owned by: SOLE REASON THAT LOWER COURTS WILL NOT BE ABLE TO
A. Toll Road Operation and Maintenance GRANT PRAYER FOR ISSUANCE OF TRO/INJUNC
Venture Corporation (TROMVC)
a. 40% owned by Singaporean co.
B. Assetvalues Holding Company, Inc (AHCI)
a. 40% Dutch-owned
C. Metro Strategic Infrastructure Holdings Inc
a. 40% by Metro Pacific Corp,
ownership/nationality not specified
ii. ART 12 SEC 11: at least 60% of whose capital must be
owned by PH citizen (which respondent showed)

5. Approval by DOTC Sec not in connection with franchise of PNCC

but in connection with powers of TRB to enter into contracts on
behalf of govt
a. DOCTRINE OF QUALIFIED POLITICAL AGENCY: act
presumptively acts of the Pres unless disapproved by latter
b. EO 497: President specifically delegated the DOTC Sec the
authority to approve contracts entered into by the TRB
c. Re: ERRORS OF PETITIONERS STAND
i. Power to grant franchises/issue authorizations for
operation not exclusive to Congress
ii. Except for special classes demanding exclusive and
personal exercise by President of constitutionally
vested power, President acts through alter ego whose
acts are as if the Chief Executives own
iii. No lease, transfer, grant of usufruct, sale, or
assignment of franchise by PNCC or its merger with
another company took place
A. PNCC contributed franchise it possesses and
partner contributes financing