AGAN JR. VS. PIATCO [402 SCRA 612; G.R. No.

155001; 5 May 2003]

Friday, January 30, 2009 Posted by Coffeeholic Writes

Labels: Case Digests, Political Law

Facts: Some time in 1993, six business leaders, explored the possibility of investing in the new NAIA
airport terminal, so they formed Asians Emerging Dragon Corp. They submitted proposals to the
government for the development of NAIA Intl. Passenger Terminal III (NAIA IPT III). The NEDA approved
the NAIA IPT III project. Bidders were invited, and among the proposal Peoples Air Cargo (Paircargo) was
chosen. AEDC protested alleging that preference was given to Paircargo, but still the project was
awarded to Paircargo. Because of that, it incorporated into, Phil. Intl. Airport Terminals Co. (PIATCO).
The DOTC and PIATCO entered into a concession agreement in 1997 to franchise and operate the said
terminal for 21years. In Nov. 1998 it was amended in the matters of pertaining to the definition of the
obligations given to the concessionaire, development of facilities and proceeds, fees and charges, and
the termination of contract. Since MIAA is charged with the maintenance and operations of NAIA
terminals I and II, it has a contract with several service providers. The workers filed the petition for
prohibition claiming that they would lose their job, and the service providers joined them, filed a motion
for intervention. Likewise several employees of the MIAA filed a petition assailing the legality of
arrangements. A group of congressmen filed similar petitions. Pres. Arroyo declared in her speech that
she will not honor PIATCO contracts which the Exec. Branch's legal office concluded null and void.

Issue: Whether or Not the 1997 concession agreement is void, together with its amendments for being
contrary to the constitution.

Held: The 1997 concession agreement is void for being contrary to public policy. The amendments have
the effect of changing it into and entirely different agreement from the contract bidded upon. The
amendments present new terms and conditions which provide financial benefit to PIATCO which may
have the altered the technical and financial parameters of other bidders had they know that such terms
were available. The 1997 concession agreement, the amendments and supplements thereto are set
aside for being null and void.

The petitioners have local standi. They are prejudiced by the concession agreement as their livelihood is
to be taken away from them.