CASE DIGEST: HUTCHISON PORTS PHILIPPINES LIMITED vs. SBMA. G.R. No. 131367. August 31, 2000

FACTS:

Petitioner won the public bidding held by SBMA for the construction of marine container terminal in Subic Bay Freeport zone. SBMA Board of Directors already declared HPPL as the winning bidder. However, the Office of the President reversed the decision of the Board and ordered the rebidding. With this, HPPL becomes unqualified to bid. HPPL file an injunction case against SBMA.

 

ISSUE:

Whether HPPL may sue SBMA.

 

RULING:

No. HPPL cannot sue in the Philippines because it is a foreign corporation registered under the laws of the British Virgin Islands. It did not register here in the Philippines.

 

To be registered means that such foreign corporation need to obtain a license to do business here in the Philippines. Participating in the bidding process constitutes “doing business” because it shows the foreign corporation’s intention to engage in business here. 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.

 

NOTES FOR THIS CASE RE: FOREIGN CORPORATIONS

 

Under Sec. 123 of the Corporation Code of the Philippines:

 

“Foreign Corporation is a corporation formed, organized, or existing under any laws other than those of the Philippines, and whose laws allow Filipino citizens and corporations to do business in its own country or state.”

 

With regard to the foreign corporation’s power to sue or be sued, a foreign corporation transacting business in the Philippines without a license to do business has no power to sue before any court or administrative agency. But the case is different when the Philippines is going to sue a foreign corporation. Regardless of whether or not it has license to do business in the Philippines, it may be sued on any valid cause of action recognized under Philippine laws. This is based on the Doctrine of Quasi-Estoppel by Acceptance of Benefits.

 

To constitute “doing business in the Philippines, the acts of the foreign corporation must imply continuity of its commercial transactions and the performance of its functions whether it may be incidental or in pursuance of its corporate purpose or objectives. There is also the continuity of the substance of the business enterprise in the Philippines.

 

Thus, even if the corporation does a single or isolated transaction but the element of continuity is present, then it only indicates the corporation’s intention to do business in the Philippines.