Hutchison Ports v. SBMA

HUTCHISON PORTS PHILIPPINES LIMITED

v.

SUBIC BAY METROPOLITAN AUTHORITY

G.R. No. 131367 August 31, 2000

FACTS OF THE CASE

The Subic Bay Metropolitan Authority (or SBMA) advertised in leading national daily newspapers and in one international publication, an invitation offering to the private sector the opportunity to develop and operate a modern marine container terminal within the Subic Bay Freeport Zone. Out of seven bidders who responded to the published invitation, three were declared by the SBMA as qualified bidders after passing the pre-qualification evaluation conducted by the SBMA’s Technical Evaluation Committee (or SBMA-TEC). Among these is the petitioner.

Thereafter, the services of three (3) international consultants recommended by the World Bank for their expertise were hired by SBMA to evaluate the business plans submitted by each of the bidders, and to ensure that there would be a transparent and comprehensive review of the submitted bids. The SBMA also hired the firm of Davis, Langdon and Seah Philippines, Inc. to assist in the evaluation of the bids and in the negotiation process after the winning bidder is chosen. All the consultants, after such review and evaluation unanimously concluded that HPPL’s Business Plan was “far superior to that of the two other bidders.”

However, even before the sealed envelopes containing the bidders’ proposed royalty fees could be opened at the appointed time and place, RPSI formally protested that ICTSI is legally barred from operating a second port in the Philippines based on Executive Order No. 212 and Department of Transportation and Communication (DOTC) Order 95-863.

ISSUE

 Whether the petitioner HPPL has the legal capacity to seek redress from the Court.

RULING

Yes. Admittedly, petitioner HPPL is a foreign corporation, organized and existing under the laws of the British Virgin Islands. While the actual bidder was a consortium composed of petitioner, and two other corporations, namely, Guoco Holdings (Phils.) Inc. and Unicol Management Services, Inc., it is only petitioner HPPL that has brought the controversy before the Court, arguing that it is suing only on an isolated transaction to evade the legal requirement that foreign corporations must be licensed to do business in the Philippines to be able to file and prosecute an action before Philippines courts.

There is no general rule or governing principle laid down as to what constitutes “doing” or “engaging in” or “transacting” business in the Philippines. Each case must be judged in the light of its peculiar circumstances.Thus, it has often been held that a single act or transaction may be considered as “doing business” when a corporation performs acts for which it was created or exercises some of the functions for which it was organized. The amount or volume of the business is of no moment, for even a singular act cannot be merely incidental or casual if it indicates the foreign corporation’s intention to do business.

Participating in the bidding process constitutes “doing business” because it shows the foreign corporation’s intention to engage in business here. The bidding for the concession contract is but an exercise of the corporation’s reason for creation or existence. Thus, it has been held that “a foreign company invited to bid for IBRD and ADB international projects in the Philippines will be considered as doing business in the Philippines for which a license is required.”