Case Digest: GREATER METROPOLITAN MANILA SOLID WASTE MANAGEMENT COMMITTEE and the METRO MANILA DEVELOPMENT AUTHORITY v. JANCOM ENVIRONMENTAL CORPORATION and JANCOM INTERNATIONAL DEVELOPMENT PROJECTS PTY. LIMITED OF AUSTRALIA 494 SCRA 280 (2006)

GREATER METROPOLITAN MANILA SOLID WASTE MANAGEMENT COMMITTEE and the METRO MANILA DEVELOPMENT AUTHORITY v. JANCOM ENVIRONMENTAL CORPORATION and JANCOM INTERNATIONAL DEVELOPMENT PROJECTS PTY. LIMITED OF AUSTRALIA 494 SCRA 280 (2006)

President Fidel Ramos issued Presidential Memorandum Order no. 202 creating an Executive Committee (EC) to oversee and develop waste-to-energy projects for the waste disposal sites in Rizal and Carmona under the Build-Operate-Transfer (BOT) scheme. Respondent Jancom International Development Projects Pty. Limited of Australia was one of the bidders for the Rizal Site which subsequently entered into a partnership with its co-respondent Asea Brown Boveri under the firm name Jancom Environmental Corporation (JANCOM). Consequently, EC declared JANCOM as the sole complying bidder of the Rizal Waste Disposal Site hence a Contract for the BOT implementation of the Solid Waste Management Project for the Rizal Site was entered between Greater Metropolitan Manila Solid Waste Management Committee (GMMSWMC) and Metro Manila Development Authority (MMDA), and JANCOM. The contract was submitted for approval to President Ramos who subsequently endorsed it to then incoming President Joseph E. Estrada. Owing to the clamor of the residents of Rizal, the Estrada administration ordered the closure of the San Mateo landfill. GMMSWMC thereupon adopted a Resolution not to pursue the contract with JANCOM, citing as reasons therefore the passage of Republic Act 8749, otherwise known as the Clean Air Act of 1999, the non-availability of the San Mateo site, and costly tipping fees. JANCOM filed a petition with the Regional Trial Court (RTC) of Pasig City to declare the GMMSWMC Resolution and the acts of MMDA calling for the bids for and authorizing the forging of a new contract for the Metro Manila waste management as illegal, unconstitutional and void, and to enjoin them from implementing the Resolution and making another award. The trial court ruled in favor of JANCOM which was subsequently affirmed by the Court of Appeals. The Supreme Court declared the contract valid and perfected, albeit ineffective and unimplementable pending the approval by the President. JANCOM and MMDA later entered into negotiations to modify certain provisions of the contract which were embodied in a draft Amended Agreement which bore no signature of the parties. JANCOM then filed before the Pasig City RTC an Omnibus Motion for a writ of execution which upon its issuance, was challenged by GMMSWMC and MMDA. The Court of Appeals however affirmed the RTC Order.

ISSUE:

Whether or not contract is ineffective and unimplentable until and unless it is approved by the President.

HELD:

The only question before the Court is whether or not there is a valid and perfected contract between the parties. As to necessity, expediency, and wisdom of the contract, these are outside the realm of judicial adjudication. These considerations are primarily and exclusively a matter for the President to decide. While the Court recognizes that the garbage problem is a matter of grave public concern, it can only declare that the contract in question is a valid and perfected one between the parties, but the same is still ineffective or unimplementable until and unless it is approved by the President, the contract itself providing that such approval by the President is necessary for its effectivity. In issuing the alias writ of execution, the trial court in effect ordered the enforcement of the contract despite this Court‘s unequivocal pronouncement that albeit valid and perfected, the contract shall become effective only upon approval by the President.