LEO Y. QUERUBIN, MARIA CORAZON M. AKOL, AND AUGUSTO C. LAGMAN PETITIONERS, VS. COMMISSION ON ELECTIONS EN BANC, REPRESENTED BY CHAIRPERSON J. ANDRES D. BAUTISTA, AND JOINT VENTU…

Querubin versus Commission on Elections

The Case

This is a petition for certiorari and prohibition, with a prayer for injunctive relief, brought by Leo Querubin, Maria Corazon Akol, and Augusto Lagman against the Commission on Elections en banc and the joint venture of Smartmatic and its partners. The petitioners, suing as taxpayers, ask the Supreme Court to annul the Commission's decision granting the protest of the Smartmatic joint venture and declaring it the bidder with the lowest calculated responsive bid for the lease with option to purchase of twenty-three thousand precinct-based optical mark reader machines for the 2016 national and local elections. The case matters because it draws the line between the adjudicatory and the administrative acts of a constitutional commission, and because it fixes the proper remedy and the proper forum for protesting a procurement award.

Procedural History

The Commission on Elections, through its Bids and Awards Committee, conducted a two-stage competitive bidding. After post-qualification, the Bids and Awards Committee disqualified the Smartmatic joint venture. The joint venture moved for reconsideration, which was denied, and then filed a protest with the Commission en banc. The Commission en banc granted the protest in its decision of June 29, 2015, declaring the joint venture the bidder with the lowest calculated responsive bid and cancelling the second round of bidding. From that decision, the petitioners went directly to the Supreme Court by a petition for certiorari and prohibition under Rule 64, with a prayer for injunctive relief. The Supreme Court treated the petition as one filed under Rule 65 and resolved it on the merits.

Facts

On October 27, 2014, the Commission en banc released the bidding documents for the lease with option to purchase of twenty-three thousand new units of precinct-based optical mark readers, with a total approved budget for contract of two billion five hundred three million five hundred eighteen thousand pesos, to be used in the 2016 national and local elections. The deadline for eligibility requirements and initial technical proposals was set for December 4, 2014. The Smartmatic joint venture submitted its bid on that date. In a sworn certification, it disclosed that one of its partner corporations, Smartmatic-TIM Corporation, had a pending application with the Securities and Exchange Commission to amend its articles of incorporation. The amendments, adopted as early as November 12, 2014, were approved by the Securities and Exchange Commission on December 10, 2014.

The Bids and Awards Committee declared the Smartmatic joint venture and its competitor Indra eligible for the second stage. After the final tenders were submitted, the joint venture was declared to have a complete and responsive financial proposal, while Indra was disqualified for a non-responsive bid. For post-qualification, the joint venture was required to submit additional documents and a prototype of its optical mark reader, which was tested against the terms of reference.

After post-qualification, the Bids and Awards Committee disqualified the joint venture on two grounds: failure to submit a valid articles of incorporation, and failure of the demo unit to meet the technical requirement that the system write all data, audit logs, statistics, and ballot images simultaneously in at least two data storages. On reconsideration, the Committee held that the joint venture had complied with the requirement of a valid articles of incorporation, but still disqualified it on the technical ground. The joint venture protested. It was allowed to demonstrate compliance again, first before the Technical Evaluation Committee and then before the Commission en banc. Using a digital storage oscilloscope, the Technical Evaluation Committee found that the machine wrote to both storage cards simultaneously, and the Commission en banc, adopting that report, granted the protest. One commissioner dissented in part on the sufficiency of the documents submitted, and the petitioners, taking their cue from that dissent, filed this case.

Issues

• Whether or not a petition under Rule 64 is the proper remedy to assail a decision of the Commission on Elections en banc rendered in the exercise of its administrative functions.
• Whether or not the Commission en banc acted with grave abuse of discretion amounting to lack or excess of jurisdiction in granting the protest and declaring the Smartmatic joint venture the bidder with the lowest calculated responsive bid.
• Whether or not a writ of preliminary injunction or a temporary restraining order should issue.

Applicable Provisions

Article IX-A, Section 7 of the 1987 Constitution provides:

Section 7. Each Commission shall decide by a majority vote of all its Members, any case or matter brought before it within sixty days from the date of its submission for decision or resolution. A case or matter is deemed submitted for decision or resolution upon the filing of the last pleading, brief, or memorandum required by the rules of the Commission or by the Commission itself. Unless otherwise provided by this Constitution or by law, any decision, order, or ruling of each Commission may be brought to the Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a copy thereof.

This is the constitutional basis for the remedy, and the Court reads its phrase decision, order, or ruling as reaching only adjudicatory acts.

Section 14 of Batas Pambansa Blg. 68, the Corporation Code, provides:

Section 14. Contents of the articles of incorporation. All corporations organized under this code shall file with the Securities and Exchange Commission articles of incorporation in any of the official languages duly signed and acknowledged by all of the incorporators, containing substantially the following matters, except as otherwise prescribed by this Code or by special law: x x x x 2. The specific purpose or purposes for which the corporation is being incorporated. Where a corporation has more than one stated purpose, the articles of incorporation shall state which is the primary purpose and which is/are the secondary purpose or purposes: Provided, That a non-stock corporation may not include a purpose which would change or contradict its nature as such x x x.

The petitioners invoke this provision to argue that a partner corporation whose stated purpose had already been served could no longer validly bid.

Ruling

On the first issue, the Court held that the petition was not the proper remedy, because Rule 64 covers only judgments and final orders of the Commission on Elections in the exercise of its quasi-judicial functions, and not its administrative orders. The Court explained that the phrase decision, order, or ruling in the Constitution relates only to those rendered in the exercise of adjudicatory or quasi-judicial powers, meaning the Commission's authority as sole judge of election contests, returns, and qualifications. A procurement protest is different. It springs from the Commission's duty to enforce and administer election laws and from its authority under the Automated Elections Law to procure equipment by purchase, lease, or other forms of acquisition. The proper remedy, therefore, is a petition for certiorari under Rule 65, which lies only upon a showing of grave abuse of discretion so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform the duty enjoined. The Court nevertheless relaxed the rules and treated the petition as one filed under Rule 65, because the petitioners presented a meritorious case.

On the second issue, the Court found no grave abuse of discretion. The Commission en banc had before it the Technical Evaluation Committee's report, which used a digital storage oscilloscope to show that the machine wrote to both storage cards simultaneously, and the Commission adopted that finding. On the corporate purpose argument, the Court noted that the Securities and Exchange Commission had already approved the amendment broadening the partner corporation's primary purpose, and that the alleged defect in the articles of incorporation did not go to the heart of the eligibility requirements. The Court also rejected the claim of misrepresentation of nationality, since the law requires that the joint venture be Filipino and not necessarily each of its proponents. The finding of eligibility and responsiveness was therefore supported by substantial evidence, and the Commission did not act capriciously or whimsically.

On the third issue, since the petition lacked merit, the prayer for injunctive relief necessarily failed.

Doctrine

A Bar candidate must retain these rules. First, under Article IX-A, Section 7 of the Constitution, only decisions, orders, or rulings of a constitutional commission rendered in the exercise of its adjudicatory or quasi-judicial powers may be brought directly to the Supreme Court on certiorari under Rule 64. Administrative orders of the Commission on Elections are not covered, and the proper remedy is a petition for certiorari under Rule 65, which requires a showing of grave abuse of discretion amounting to lack or excess of jurisdiction. Second, a procurement protest is administrative in nature, because it arises from the Commission's duty to administer election laws and its authority to procure equipment, and not from an election contest. Third, the writ of certiorari will not issue on a mere abuse of discretion; the abuse must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform the duty enjoined. Fourth, the Court may relax procedural rules and treat a petition filed under the wrong rule as one filed under the correct rule when a meritorious case is shown.

Disposition

The petition was dismissed for lack of merit, and the decision of the Commission on Elections en banc of June 29, 2015 was affirmed.

Remember This

Remember the line that Rule 64 reaches only the quasi-judicial acts of the Commission on Elections, while its administrative acts, including procurement rulings, are tested under Rule 65 on grave abuse of discretion. Examiners use this case to test the distinction between adjudicatory and administrative functions of constitutional commissions, and the proper remedy and forum for procurement protests.