CA voids PH gov’t contract with Japanese consortium

MANILA, Philippines–The Court of Appeals has voided a multimillion-peso deal awarded to a Japanese consortium in 2005 for the development of the 2,489-square-meter Nampeidai property of the Philippine government in Tokyo, Japan.

In a decision released last Friday, the appellate court’s former First Division ruled that the award of the contract to the Nagayama Taisei Consortium (NTC) was void because it had no corporate existence.

The court cited a June 2009 letter by Shigeru Ikemoto, legal chief of Taisei Corp., a member of the consortium, wherein he informed the government to deny participation in the formation of the NTC and in the bidding for the Nampeidai.

The court said the NTC failed to comply with the requirement for the submission of a sworn undertaking, in violation of the terms of reference for the development of the Philippine government properties in Japan and the provisions of Republic Act No. 9184, or the 2002 Government Procurement Reform Act.

“Records are replete with evidence to establish that Taisei Corp. had no knowledge of, much less agreed to, being part of the NTC, and that accordingly, the signatures of its supposed representatives in the consortium have been forged,” stated the decision penned by Presiding Justice Andres Reyes Jr.

The other former division members, Justices Rodil Zalamea and Ramon Bato, concurred in the ruling.

The appeals court also declared as void ab initio (from the beginning) the 2006 service development agreement (SDA) for the enforcement of the project signed by the government and the NTC in 2006, as well as a supplementary agreement signed in 2008.

“Verily, a valid SDA necessitates a valid notice of award, which in turn requires a properly conducted bidding process from which a qualified bidder emerges. The same cannot be said in this case, as the NTC is fictitious consortium with no authority nor capacity to perform acts with legal effect,” the justices said.

The Philippine government, however, was ordered to make a restitution to Masaichi Tsuchiya, NTC’s attorney-in-fact or his representatives, in the amount of 480 million yen with legal interest at 6-percent per annum. Tsuchiya paid the amount as part of the required fees in the now nullified development agreements.