The Supreme Court (SC) has sustained the validity of the agreement between the Metro Manila Development Authority (MMDA) and a private firm to undertake improvement and maintenance of all existing MMDA-owned passenger stations in all major streets in the metropolis, among others.
In an 11-page decision, the SC’s Second Division through Associate Justice Ramon Paul Hernando denied the petition filed by then MMDA chair and now senator Francis Tolentino seeking the reversal of the ruling issued by the Court of Appeals in 2013.
The 2013 decision of the appellate court affirmed the resolution issued by the Regional Trial Court of Quezon City Branch 95 upholding the validity of the compromise agreement dated June 16, 2010 between the MMDA and High Desert Stop Overs, Inc. (HDSOI).
The MMDA argued that the compromise agreement entered into by the MMDA and HDSOI without the participation of the Office of the Solicitor General is null and void.
According to the agency, the Solicitor General represents the government, its agencies and instrumentalities in any litigation, investigation, or matter requiring the services of a lawyer.
Since the compromise agreement was not reviewed, approved and signed by the OSG, Tolentino said it should be declared void from the beginning.
Then MMDA chairman stressed that the CA failed to address their arguments that the compromise agreement should have been declared null and void for being grossly disadvantageous to the government.
Tolentino said that former MMDA Chairman Oscar Inocentes and HDSOI managed to extend the agreements which were about to expire at the time for another 15 years in the form of the compromise agreement with the approval of the OSG.
In its ruling, the SC held that the government is now bound by the MOA due to its failure to question the same on time.
“At the very least, even if the OSG had no prior knowledge of the MOA, it was duly notified on November 10, 2010 when it received a copy of the assailed judgment dated July 2, 2010 together with other orders issued by the trial which approved the MOA. Notwithstanding such knowledge, the OSG failed to file an appeal or resort to other remedies to contest the validity of the MOA,” the high court ruled.
“That being so, an action for annulment of judgment is an improper remedy to belatedly question the rental rate of the passenger station built by HDSOI under the MOA. After a decision is declared final and executory, vested rights are acquired by the winning party,” it said.
It can be recalled that the MMDA and HDSOI signed three agreements giving the latter the authority to construct, finance, operate and maintain 250 passenger stations under the build-operate-transfer (BOT) Law within Metro Manila starting 1992.
However, in 2006, former MMDA Chairman Bayani Fernando decided to rescind the agreements, prompting HDSOI to file a complaint for injunction and damages with prayer for the issuance of a temporary restraining order and/or writ of preliminary injunction.
In 2010, the Metro Manila Council issued a resolution allowing Inocentes to enter into an amicable settlement with HDSOI.
The MMDA and HDSOI entered into a memorandum of agreement for and in consideration of dropping all outstanding legal suits against the former.