G.R. No. 131367 – 393 Phil. 843 – 339 SCRA 434 – Mercantile Law – Corporation Law – Foreign Corporation – License Requirement
In 1996, Hutchison Ports Philippines Limited (HPPL) won a public bidding conducted by the Subic Bay Metropolitan Authority (SBMA). The project was to develop and operate a modern marine container terminal within the Subic Bay Freeport Zone. The SBMA Board of Directors already declared HPPL as the winner but later on, the Office of the President reversed the decision of the Board and ordered a rebidding. In the rebidding however, HPPL was no longer among the qualified bidders. Eventually, HPPL filed a petition for injunction to enjoin SBMA from conducting the rebidding.
ISSUE: Whether or not Hutchison has the right to file an injunction case against SBMA.
HELD: No. The declaration made by the SBMA Board declaring HPPL as the winning bidder was neither final nor unassailable. Under LOI No. 620, all projects undertaken by the SBMA are subject to the approval of the Office of the President. Hence, the Board of SBMA is under the control and supervision of the President of the Philippines. Therefore, the declaration made by the Board did not vest any right in favor of HPPL.
Further, HPPL cannot sue in the Philippines. It is a foreign corporation registered under the laws of the British Virgin Islands. It did not register here in the Philippines.
HPPL cannot invoke that it was suing only on an isolated transaction. The conduct of bidding is not an isolated transaction. It is “doing business” here in the Philippines. The Supreme Court emphasized that as a general rule, “doing” or “engaging in” or “transacting” business in the Philippines is a case to case basis. It has often been held that a single act or transaction may be considered as “doing business” when a corporation performs acts for which it was created or exercises some of the functions for which it was organized. The amount or volume of the business is of no moment, for even a singular act cannot be merely incidental or casual if it indicates the foreign corporation’s intention to do business.
Participating in the bidding process constitutes “doing business” because it shows the foreign corporation’s intention to engage in business here. The bidding for the concession contract is but an exercise of the corporation’s reason for creation or existence. Therefore, HPPL has done business here without license. It cannot now sue in the Philippines without license because its participation in the bidding is not merely an isolated transaction.
The primary purpose of the license requirement is to compel a foreign corporation desiring to do business within the Philippines to submit itself to the jurisdiction of the courts of the state and to enable the government to exercise jurisdiction over them for the regulation of their activities in this country.
