G.R. No. 183789 - POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION, VS. POZZOLANIC PHILIPPINES INCORPORATED.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, in April 1989, respondent Pozzolanic was formally incorporated to take over Pozzolanic Australia's business in the Philippines. [11] Respondent then commenced to exercise its rights under the Batangas contract in June, 1989. [12] In 1998, the Masinloc Coal-Fired Thermal Power Plant (Masinloc Plant) started operations to provide power for NPC. Late that year, respondent began the installation of its fly ash processing equipment in the Masinloc Plant and began off taking the fly ash produced therein. [13] Subsequently, on 15 February 1999, NPC and respondent, on an interim basis and prior to the conduct of a public bidding for the contract to purchase the Masinloc Plant's fly ash, executed a contract whereby respondent was given the right to purchase the said fly ash for a period of one year. [14] The fourth and fifth "WHEREAS" clauses of the contract provide: WHEREAS, under the `Contract for the Purchase of the Fly Ash of Batangas Coal-Fired Thermal Power Plant' dated 20 October 1987, PURCHASER was granted the right of first refusal over any and all fly ash that may be produced by any of NPC's coal-fired power plants in the Philippines; WHEREAS, NPC intends to bid out the long term contract for the Fly Ash that may be produced by the (Masinloc Coal Fired Thermal Power) Plant subject to the second paragraph of Article I of the original contract between the parties which was signed on 20 October 1987 giving PURCHASER the right of first refusal. [15] In October 1999, the Sual Coal-Fired Power Plant started providing electricity in the Luzon region. [16] NPC thereafter caused to be published in the Philippine Star and the Manila Bulletin [17] an "Invitation to Pre-Qualify and to Bid," inviting all interested buyers to pre-qualify for the purchase of fly ash from the Masinloc and/or Sual Power Plants. [18] As a result, respondent sent letters to NPC calling its attention to respondent's right of first refusal under the Batangas Contract. It also demanded that any tender documents to be issued in connection with the bidding on the right to purchase the Masinloc and Sual Plants' fly ash include notices informing prospective bidders of respondent's right of first refusal. In a letter dated 7 March 2000, NPC informed respondent that it had decided to defer indefinitely the bidding on the right to purchase the Masinloc Plant's fly ash and to proceed first with the bidding on the right to purchase the Sual Plant's fly ash. Thus, on 7 April 2000, NPC released the tender documents for the bidding on the Sual Plant's fly ash, which tender documents made no reference to respondent's right of first refusal. [19] This prompted respondent to file a complaint [20] (later amended [21] ) with the trial court praying that NPC be ordered to allow Pozzolanic to exercise its right of first refusal by permitting it to match the price and terms offered by the winning bidder and by awarding the contract for the purchase of the Sual Plant's fly ash to Pozzolanic