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G.R. No.

210858 June 29, 2016

DEPARTMENT OF FOREIGN AFFAIRS, Petitioner,


vs.
BCA INTERNATIONAL CORPORATION, Respondent.

DECISION

CARPIO, J.:

The Case

This petition for review1 assails the Orders dated 11 October 20132 and 8 January 2014,3 as well as
the Resolution dated 2 September 2013,4 of the Regional Trial Court of Makati City (RTC), Branch
146, in SP. PROC. No. M-7458.

The Facts

In an Amended Build-Operate-Transfer Agreement dated 5 April 2002 (Agreement), petitioner


Department of Foreign Affairs (DFA) awarded the Machine Readable Passport and Visa Project
(MRPN Project) to respondent BCA International Corporation (BCA), a domestic corporation. During
the implementation of the MRPN Project, DFA sought to terminate the Agreement. However, BCA
opposed the termination and filed a Request for Arbitration, according to the provision in the
Agreement:

Section 19.02. Failure to Settle Amicably - If the Dispute cannot be settled amicably within ninety
(90) days by mutual discussion as contemplated under Section 19.01 herein, the Dispute shall be
settled with finality by an arbitrage tribunal operating under International Law, hereinafter referred to
as the "Tribunal", under the UNCITRAL Arbitration Rules contained in Resolution 31/98 adopted
by the United Nations General Assembly on December 15, 1976, and entitled "Arbitration Rules
on the United Nations Commission on the International Trade Law". The DFA and the BCA
undertake to abide by and implement the arbitration award. The place of arbitration shall be Pasay
City, Philippines, or such other place as may be mutually agreed upon by both parties. The
arbitration proceeding shall be conducted in the English language.5 (Emphasis supplied)

On 29 June 2009, an ad hoc arbitral tribunal6 was constituted. In an Order dated 15 April 2013,7 the
arbitral tribunal approved BCA's request to apply in court for the issuance of subpoena, subject to
the conditions that the application will not affect its proceedings and the hearing set in October 2013
will proceed whether the witnesses attend or not.

On 16 May 2013, BCA filed before the RTC a Petition for Assistance in Taking Evidence8 pursuant to
the Implementing Rules and Regulations (IRR) of "The Alternative Dispute Resolution Act of 2004,"
or Republic Act No. 9285 (RA 9285). In its petition, BCA sought the issuance of subpoena ad
testificandum and subpoena duces tecum to the following witnesses and documents in their
custody:9

Witnesses Documents to be produced


1. Secretary of Foreign Affairs or his a. Request for Proposal dated
representative/s, specifically Undersecretary September 10, 1999 for the MRP/V
Project;
Franklin M. Ebdalin and Ambassador Belen b. Notice of Award dated September 29,
F. Anota 2000 awarding the MRP/V Project
Company to implement the MRP/V
Project;
c. Department of Foreign Affairs
Machine Readable Passport and Visa
Project Build-Operate-Transfer
Agreement dated February 8, 2001;
d. Department of Foreign Affairs
Machine Readable Passport and Visa
Project Amended Build-Operate-
Transfer Agreement dated April 5,
2002;
e. Documents, records, papers and
correspondence between DFA and
BCA regarding the negotiations for
the contract of lease of the PNB
building, which was identified in the
Request for Proposal as the Central
Facility Site, and the failure of said
negotiations;
f. Documents, records, reports, studies,
papers and correspondence between
DFA and BCA regarding the search
for alternative Central Facility Site;
g. Documents, records, papers and
correspondence between DFA and
BCA regarding the latters submission
of the Project Master Plan (Phase
One of the MRP/V Project);
h. Documents, records, papers and
correspondence among DFA, DFAs
Project Planning Team, Questronix
Corporation, MRP/V Advisory Board
and other related government
agencies, and BCA regarding the
recommendation for the issuance of
the Certificate of Acceptance in favor
of BCA;
i. Certificate of Acceptance for Phase
One dated June 9, 2004 issued by
DFA;
j. Documents, records, papers and
correspondence between DFA and
BCA regarding the approval of the
Star Mall complex as the Central
Facility Site;
k. Documents, records, papers and
correspondence among DFA,
Questronix Corporation, MRP/V
Advisory Board and other related
government agencies, and BCA
regarding the recommendation for the
approval of the Stare Mall complex as
the Central Facility Site;
l. Documents, records, papers and
correspondence between DFA and
BCA regarding the DFAs request for
BCA to terminate its Assignment
Agreement with Philpass, including
BCAs compliance therewith;
m. Documents, records, papers and
correspondence between DFA and
BCA regarding the DFAs demand for
BCA to prove its financial capability to
implement the MRP/V Project,
including the compliance therewith by
BCA;
n. Documents, records, papers and
correspondence between DFA and
BCA regarding the DFAs attempt to
termiante the Amended BOT
Agreement, including BCAs
response to DFA and BCAs attempts
to mutually discuss the matter with
DFA;
o. Documents, records, papers and
correspondence among DFA and
MRP/V Advisory Board, DTI-BOT
Center, Department of Finance and
Commission on Audit regarding the
delays in the implementation of the
MRP/V Project, DFAs requirement
for BCA to prove its financial
capability, and the opinions of the
said government agencies in relation
to DFAs attempt to terminate the
Amended BOT Agreement; and
p. Other related documents, records,
papers and correspondence.

2. Secretary of Finance or his a. Documents, records, papers and


representative/s, specifically former correspondence between DFA and
Secretary of Finance Juanita D. Amatong Department of Finance regarding the
DFAs requirement for BCA to prove
its financial capability to implement
the MRP/V Project and its opinion
thereon;
b. Documents, records, papers and
correspondence between DFA and
DOF regarding BCAs compliance
with DFAs demand for BCA to further
prove its financial capability to
implement the MRP/V Project;
c. Documents, records, papers and
correspondence between DFA and
DOF regarding the delays in the
implementation of the MRP/V Project;
d. Documents, records, papers and
correspondence between DFA and
DOF regarding the DFAs attempted
termination of the Amended BOT
Agreement; and
e. Other related documents, records,
papers and correspondence.

3. Chairman of the Commission on Audit or a. Documents, records, papers and


her representative/s, specifically Ms. correspondence between DFA and
Iluminada M.V. Fabroa (Director IV) COA regarding the COAs conduct of
a sectoral performance audit on the
MRP/V Project;
b. Documents, records, papers and
correspondence between DFA and
COA regarding the delays in and its
recommendation to fast-track the
implementation of the MRP/V Project;
c. Documents, records, papers and
correspondence between DFA and
COA regarding COAs advice to
cancel the Assignment Agreement
between BCA and Philpass "for being
contrary to existing laws and
regulations and DOJ opinion";
d. Documents, records, papers and
correspondence between DFA and
COA regarding DFAs attempted
termination of the Amended BOT
Agreement; and
e. Other related documents, records,
papers and correspondence.

4. Executive Director or any officer or a. Documents, records, papers and


representative of the Department of Trade correspondence between DFA and
and Industry Build-Operate-Transfer Center, BOT Center regarding the delays in
specifically Messrs. Noel Eli B. Kintanar, the implementation of the MRP/V
Rafaelito H. Taruc and Luisito Ucab Project, including DFAs delay in the
issuance of the Certificate of
Acceptance for Phase One of the
MRP/V Project and in approving the
Central Facility Site at the Star Mall
complex;
b. Documents, records, papers and
correspondence between DFA and
BOT Center regarding BCAs
financial capability and the BOT
Centers opinion on DFAs demand
for BCA to further prove its financial
capability to implement the MRP/V
project;
c. Documents, records, papers and
correspondence between DFA and
BOT Center regarding the DFAs
attempt to terminate the Amended
BOT Agreement, including the BOT
Centers unsolicited advice dated
December 23, 2005 stating that the
issuance of the Notice of Termination
was "precipitate, and done without
first carefully ensuring that there were
sufficient grounds to warrant such an
issuance" and was "devoid of merit";
d. Documents, records, papers and
correspondence between DFA and
BOT Center regarding the DFAs
unwarrented refusal to approve
BCAs proposal to obtain the required
financing by allowing the entry of a
"strategic investor"; and
e. Other related documents, records,
papers and correspondence.

5. Chairman of the DFA MRP/V Advisory a. Documents, records, papers and


Board or his representative/s, specifically correspondence between DFA and
DFA Undersecretary Franklin M. Ebdalin and the MRP/V Advisory Board regarding
MRP/V Project Manager, specifically Atty. BCA[s] performance of its obligations
Voltaire Mauricio for Phase One of the MRP/V Project,
the MRP/V Advisory Boards
recommendation for the issuance of
the Certificate of Acceptance of
Phase One of the MRP/V Project and
its preparation of the draft of the
Certificate of Acceptance;
b. Documents, records, papers and
correspondence between DFA and
the MRP/V Advisory Board regarding
the latters recommendation for the
DFA to approve the Star Mall
complex as the Central Facility Site;
c. Documents, records, papers and
correspondence between DFA and
the MRP/V Advisory Board regarding
BCAs request to allow the
investment of S.F. Pass International
in Philpass;
d. Documents, records, papers and
correspondence between DFA and
the MRP/V Advisory Board regarding
BCAs financial capability and the
MRP/V Advisory Boards opinion on
DFAs demand for BCA to further
prove its financial capability to
implement the MRP/V Project;
e. Documents, records, papers and
correspondence between DFA and
the MRP/V Advisory Board regarding
the DFAs attempted termination of
the Amended BOT Agreement; and
f. Other related documents, records,
papers and correspondence.

On 1 July 2013, DFA filed its comment, alleging that the presentation of the witnesses and
documents was prohibited by law and protected by the deliberative process privilege.

The RTC Ruling

In a Resolution dated 2 September 2013, the RTC ruled in favor of BCA and held that the evidence
sought to be produced was no longer covered by the deliberative process privilege. According to the
RTC, the Court held in Chavez v. Public Estates Authority10 that acts, transactions or decisions are
privileged only before a definite proposition is reached by the agency and since DFA already made a
definite proposition and entered into a contract, DFA's acts, transactions or decisions were no longer
privileged.11

The dispositive portion of the RTC Resolution reads:

WHEREFORE, the petition is granted. Let subpoena ad testificandum [and subpoena] duces
tecum be issued to the persons listed in paragraph 11 of the Petition for them to appear and bring
the documents specified in paragraph 12 thereof, before the Ad Hoc Tribunal for the hearings on
October 14, 15, 16, 17, 2013 at 9:00 a.m. and 2:00 p.m. at the Malcolm Hall, University of the
Philippines, Diliman, Quezon City.12

On 6 September 2013, the RTC issued the subpoena due es tecum and subpoena ad
testificandum. On 12 September 2013, DFA filed a motion to quash the subpoena duces tecum and
subpoena ad testificandum, which BCA opposed.

In an Order dated 11 October 2013, the RTC denied the motion to quash and held that the motion
was actually a motion for reconsideration, which is prohibited under Rule 9.9 of the Special Rules of
Court on Alternative Dispute Resolution (Special ADR Rules).
On 14, 16, and 17 October 2013, Undersecretary Franklin M. Ebdalin (Usec. Ebdalin), Atty. Voltaire
Mauricio (Atty. Mauricio), and Luisi to Ucab (Mr. Ucab) testified before the arbitral tribunal pursuant
to the subpoena.

In an Order dated 8 January 2014, the RTC denied the motion for reconsideration filed by DFA. The
RTC ruled that the motion became moot with the appearance of the witnesses during the arbitration
hearings. Hence, DFA filed this petition with an urgent prayer for the issuance of a temporary
restraining order and/or a writ of preliminary injunction.

In a Resolution dated 2 April 2014, the Court issued a temporary restraining order enjoining the
arbitral tribunal from taking cognizance of the testimonies of Usec. Ebdalin, Atty. Mauricio, and Mr.
Ucab.

The Issues

DFA raises the following issues in this petition: (1) the 1976 UNCITRAL Arbitration Rules and the
Rules of Court apply to the present arbitration proceedings, not RA 9285 and the Special ADR
Rules; and (2) the witnesses presented during the 14, 16, and 17 October 2013 hearings before
the ad hoc arbitral tribunal are prohibited from disclosing information on the basis of the deliberative
process privilege.

The Ruling of the Court

We partially grant the petition.

Arbitration is deemed a special proceeding13 and governed by the special provisions of RA 9285, its
IRR, and the Special ADR Rules. 14 RA 9285 is the general law applicable to all matters and
controversies to be resolved through alternative dispute resolution methods. 15 While enacted only in
2004, we held that RA 9285 applies to pending arbitration proceedings since it is a procedural law,
which has retroactive effect:

While RA 9285 was passed only in 2004, it nonetheless applies in the instant case since it is a
procedural law which has a retroactive effect. Likewise, KOGIES filed its application for
arbitration before the KCAB on July 1, 1998 and it is still pending because no arbitral award has yet
been rendered. Thus, RA 9285 is applicable to the instant case. Well-settled is the rule that
procedural laws are construed to be applicable to actions pending and undetermined at the time of
their passage, and are deemed retroactive in that sense and to that extent. As a general rule, the
retroactive application of procedural laws does not violate any personal rights because no
vested right has yet attached nor arisen from them. 16 (Emphasis supplied)

The IRR of RA 9285 reiterate that RA 9285 is procedural in character and applicable to all pending
arbitration proceedings.17 Consistent with Article 2046 of the Civil Code, 18 the Special ADR Rules
were formulated and were also applied to all pending arbitration proceedings covered by RA 9285,
provided no vested rights are impaired. 19Thus, contrary to DFA's contention, RA 9285, its IRR, and
the Special ADR Rules are applicable to the present arbitration proceeding. The arbitration between
the DFA and BCA is still pending, since no arbitral award has yet been rendered. Moreover, DFA did
not allege any vested rights impaired by the application of those procedural rules.

RA 9285, its IRR, and the Special ADR Rules provide that any party to an arbitration, whether
domestic or foreign, may request the court to provide assistance in taking evidence such as the
issuance of subpoena ad testificandum and subpoena duces tecum.20 The Special ADR Rules
specifically provide that they shall apply to assistance in taking evidence,21 and the RTC order
granting assistance in taking evidence shall be immediately executory and not subject to
reconsideration or appeal.22 An appeal with the Court of Appeals (CA) is only possible where the
RTC denied a petition for assistance in taking evidence. 23 An appeal to the Supreme Court from the
CA is allowed only under any of the grounds specified in the Special ADR Rules.24 We rule that the
DFA failed to follow the procedure and the hierarchy of courts provided in RA 9285, its IRR, and the
Special ADR Rules, when DFA directly appealed before this Court the RTC Resolution and Orders
granting assistance in taking evidence.

DFA contends that the RTC issued the subpoenas on the premise that RA 9285 and the Special
ADR Rules apply to this case. However, we find that even without applying RA 9285 and the Special
ADR Rules, the RTC still has the authority to issue the subpoenas to assist the parties in taking
evidence.

The 1976 UNCITRAL Arbitration Rules, agreed upon by the parties to govern them, state that the
"arbitral tribunal shall apply the law designated by the parties as applicable to the substance of the
dispute. Failing such designation by the parties, the arbitral tribunal shall apply the law determined
by the conflict of laws rules which it considers applicable. "25 Established in this jurisdiction is the rule
that the law of the place where the contract is made governs, or lex loci contractus.26 Since there is
no law designated by the parties as applicable and the Agreement was perfected in the Philippines,
"The Arbitration Law," or Republic Act No. 876 (RA 876), applies.

RA 876 empowered arbitrators to subpoena witnesses and documents when the materiality of the
testimony has been demonstrated to them. 27 In Transfield Philippines, Inc. v. Luzon Hydro
Corporation, 28 we held that Section 14 of RA 876 recognizes the right of any party to petition the
court to take measures to safeguard and/or conserve any matter which is the subject of the dispute
in arbitration.

Considering that this petition was not filed in accordance with RA 9285, the Special ADR Rules and
1976 UNCITRAL Arbitration Rules, this petition should normally be denied. However, we have held
time and again that the ends of justice are better served when cases are determined on the merits
after all parties are given full opportunity to ventilate their causes and defenses rather than on
technicality or some procedural imperfections. 29More importantly, this case is one of first impression
involving the production of evidence in an arbitration case where the deliberative process
privilege is invoked.

Thus, DFA insists that we determine whether the evidence sought to be subpoenaed is covered by
the deliberative process privilege. DFA contends that the RTC erred in holding that the deliberative
1wphi 1

process privilege is no longer applicable in this case. According to the RTC, based
on Chavez v. Public Estates Authority,30 "acts, transactions or decisions are privileged only before a
definite proposition is reached by the agency," and since, in this case, DFA not only made "a definite
proposition" but already entered into a contract then the evidence sought to be produced is no longer
privileged.31

We have held in Chavez v. Public Estates Authority32 that:

Information, however, on on-going evaluation or review of bids or proposals being undertaken by the
bidding or review committee is not immediately accessible under the right to information. While the
evaluation or review is still on-going, there are no "official acts, transactions, or decisions" on the
bids or proposals. However, once the committee makes its official recommendation, there arises
a "definite proposition" on the part of the government. From this moment, the public's right to
information attaches, and any citizen can access all the non-proprietary information leading to such
definite proposition.
xxxx

The right to information, however, does not extend to matters recognized as privileged information
under the separation of powers. The right does not also apply to information on military and
diplomatic secrets, information affecting national security, and information on investigations of
crimes by law enforcement agencies before the prosecution of the accused, which courts have long
recognized as confidential. The right may also be subject to other limitations that Congress may
impose by law.

There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal
deliberations of the Supreme Court and other collegiate courts, or executive sessions of either house
of Congress, are recognized as confidential. This kind of information cannot be pried open by a co-
equal branch of government. A frank exchange of exploratory ideas and assessments, free
from the glare of publicity and pressure by interested parties, is essential to protect the
independence of decision-making of those tasked to exercise Presidential, Legislative and
Judicial power. This is not the situation in the instant case.

We rule, therefore, that the constitutional right to information includes official information on on-
going negotiations before a final contract. The information, however, must constitute definite
propositions by the government and should not cover recognized exceptions like privileged
information, military and diplomatic secrets and similar matters affecting national security and
public order. Congress has also prescribed other limitations on the right to information in several
legislations. (Emphasis supplied)

Contrary to the RTC's ruling, there is nothing in our Chavez v. Public Estates Authority33 ruling which
states that once a "definite proposition" is reached by an agency, the privileged character of a
document no longer exists. On the other hand, we hold that before a "definite proposition" is reached
by an agency, there are no "official acts, transactions, or decisions" yet which can be accessed by
the public under the right to information. Only when there is an official recommendation can a
"definite proposition" arise and, accordingly, the public's right to information attaches. However, this
right to information has certain limitations and does not cover privileged information to protect the
independence of decision-making by the government.

Chavez v. Public Estates Authority34 expressly and unequivocally states that the right to information
"should not cover recognized exceptions like privileged information, military and diplomatic
secrets and similar matters affecting national security and public order." Clearly, Chavez v. Public
Estates Authority35 expressly mandates that "privileged information" should be outside the scope
of the constitutional right to information, just like military and diplomatic secrets and similar matters
affecting national security and public order. In these exceptional cases, even the occurrence of a
"definite proposition" will not give rise to the public's right to information.

Deliberative process privilege is one kind of privileged information, which is within the
exceptions of the constitutional right to information. In In Re: Production of Court Records and
Documents and the Attendance of Court Officials and Employees as Witnesses, 36 we held that:

Court deliberations are traditionally recognized as privileged communication. Section 2, Rule


10 of the IRSC provides:
Section 2. Confidentiality of court sessions. - Court sessions are executive in character, with only the
Members of the Court present. Court deliberations are confidential and shall not be disclosed to
outside parties, except as may be provided herein or as authorized by the Court.

Justice Abad discussed the rationale for the rule in his concurring opinion to the Court Resolution
in Arroyo v. De Lima (TRO on Watch List Order case): the rules on confidentiality will enable the
Members of the Court to "freely discuss the issues without fear of criticism for holding unpopular
positions" or fear of humiliation for one's comments. The privilege against disclosure of these
kinds of information/communication is known as deliberative process privilege, involving as
it does the deliberative process of reaching a decision. "Written advice from a variety of
individuals is an important element of the government's decision-making process and that the
interchange of advice could be stifled if courts forced the government to disclose those
recommendations;" the privilege is intended "to prevent the 'chilling' of deliberative communications."

The privilege is not exclusive to the Judiciary. We have in passing recognized the claim of this
privilege by the two other branches of government in Chavez v. Public Estates Authority (speaking
through J. Carpio) when the Court declared that -

[t]he information x x x like internal deliberations of the Supreme Court and other collegiate courts, or
executive sessions of either house of Congress, are recognized as confidential. This kind of
information cannot be pried open by a co-equal branch of government. A frank exchange of
exploratory ideas and assessments, free from the glare of publicity and pressure by interested
parties, is essential to protect the independence of decision-making of those tasked to exercise
Presidential, Legislative and Judicial power. (Emphasis supplied)

In Akbayan v. Aquino, 37 we adopted the ruling of the U.S. Supreme Court in NLRB v. Sears,
Roebuck & Co,38 which stated that the deliberative process privilege protects from disclosure
"advisory opinions, recommendations, and deliberations comprising part of a process by which
governmental decisions and policies are formulated." We explained that "[w]ritten advice from a
variety of individuals is an important element of the government's decision-making process and that
the interchange of advice could be stifled if courts forced the government to disclose those
recommendations"; thus, the privilege is intended "to prevent the 'chilling' of deliberative
communications."39

The privileged character of the information does not end when an agency has adopted a definite
proposition or when a contract has been perfected or consummated; otherwise, the purpose of the
privilege will be defeated.

The deliberative process privilege applies if its purpose is served, that is, "to protect the frank
exchange of ideas and opinions critical to the government's decision[-]making process where
disclosure would discourage such discussion in the future." 40 In Judicial Watch of Florida v.
Department of Justice, 41 the U.S. District Court for the District of Columbia held that the deliberative
process privilege's "ultimate purpose x x x is to prevent injury to the quality of agency decisions by
allowing government officials freedom to debate alternative approaches in private," and this ultimate
purpose would not be served equally well by making the privilege temporary or held to have expired.
In Gwich 'in Steering Comm. v. Office of the Governor, 42 the Supreme Court of Alaska held that
communications have not lost the privilege even when the decision that the documents preceded is
finally made. The Supreme Court of Alaska held that "the question is not whether the decision has
been implemented, or whether sufficient time has passed, but whether disclosure of these
preliminary proposals could harm the agency's future decision[-]making by chilling either the
submission of such proposals or their forthright consideration."
Traditionally, U.S. courts have established two fundamental requirements, both of which must be
met, for the deliberative process privilege to be invoked.43 First, the communication must
be predecisional, i.e., "antecedent to the adoption of an agency policy." Second, the communication
must be deliberative, i.e., "a direct part of the deliberative process in that it makes
recommendations or expresses opinions on legal or policy matters." It must reflect the "give-and-
take of the consultative process."44 The Supreme Court of Colorado also took into account other
considerations:

Courts have also looked to other considerations in assessing whether material is predecisional and
deliberative. The function and significance of the document in the agency's decision-making process
are relevant. Documents representing the ideas and theories that go into the making of policy, which
are privileged, should be distinguished from "binding agency opinions and interpretations" that are
"retained and referred to as precedent" and constitute the policy itself.

Furthermore, courts examine the identity and decision-making authority of the office or person
issuing the material. A document from a subordinate to a superior official is more likely to be
predecisional, "while a document moving in the opposite direction is more likely to contain
instructions to staff explaining the reasons for a decision already made."

Finally, in addition to assessing whether the material is predecisional and deliberative, and in order
to determine if disclosure of the material is likely to adversely affect the purposes of the privilege,
courts inquire whether "the document is so candid or personal in nature that public disclosure is
likely in the future to stifle honest and frank communication within the agency." As a
consequence, the deliberative process privilege typically covers recommendations, advisory
opinions, draft documents, proposals, suggestions, and other subjective documents that
reflect the personal opinions of the writer rather than the policy of the agency. 45 (Emphasis

supplied)

Thus, "[t]he deliberative process privilege exempts materials that are 'predecisional' and
'deliberative,' but requires disclosure of policy statements and final opinions 'that have the force of
law or explain actions that an agency has already taken."46

In City of Colorado Springs v. White, 47 the Supreme Court of Colorado held that the outside
consultant's evaluation report of working environment and policies was covered by the deliberative
process privilege because the report contained observations on current atmosphere and
suggestions on how to improve the division rather than an expression of final agency decision.
In Strang v. Collyer,48 the U.S. District Court for the District of Columbia held that the meeting notes
that reflect the exchange of opinions between agency personnel or divisions of agency are covered
by the deliberative process privilege because they "reflect the agency's group thinking in the process
of working out its policy" and are part of the deliberative process in arriving at the final position.
In Judicial Watch v. Clinton,49 the U.S. District Court for the District of Columbia held that handwritten
notes reflecting preliminary thoughts of agency personnel were properly withheld under the
deliberative process privilege. The U.S. District Court reasoned that "disclosure of this type of
deliberative material inhibits open debate and discussion, and has a chilling effect on the free
exchange of ideas."

This Court applied the deliberative process privilege in In Re: Production of Court Records and
Documents and the Attendance of Court Officials and Employees as Wltnesses50 and found that
court records which are "predecisional" and "deliberative" in nature - in particular, documents and
other communications which are part of or related to the deliberative process, i.e., notes, drafts,
research papers, internal discussions, internal memoranda, records of internal deliberations, and
similar papers - are protected and cannot be the subject of a subpoena if judicial privilege is to be
preserved. We further held that this privilege is not exclusive to the Judiciary and cited our ruling
in Chavez v. Public Estates Authority.51

The deliberative process privilege can also be invoked in arbitration proceedings under RA 9285.

"Deliberative process privilege contains three policy bases: first, the privilege protects candid
discussions within an agency; second, it prevents public confusion from premature disclosure of
agency opinions before the agency establishes final policy; and third, it protects the integrity of an
agency's decision; the public should not judge officials based on information they considered prior to
issuing their final decisions."52 Stated differently, the privilege serves "to assure that subordinates
within an agency will feel free to provide the decision[-]maker with their uninhibited opinions and
recommendations without fear of later being subject to public ridicule or criticism; to protect against
premature disclosure of proposed policies before they have been finally formulated or adopted; and
to protect against confusing the issues and misleading the public by dissemination of documents
suggesting reasons and rationales for a course of action which were not in fact the ultimate reasons
for the agency's action."53

Under RA 9285,54 orders of an arbitral tribunal are appealable to the courts. If an official is compelled
to testify before an arbitral tribunal and the order of an arbitral tribunal is appealed to the courts,
such official can be inhibited by fear of later being subject to public criticism, preventing such official
from making candid discussions within his or her agency. The decision of the court is widely
published, including details involving the privileged information. This disclosure of privileged
information can inhibit a public official from expressing his or her candid opinion. Future quality of
deliberative process can be impaired by undue exposure of the decision-making process to public
scrutiny after the court decision is made.

Accordingly, a proceeding in the arbitral tribunal does not prevent the possibility of the purpose of
the privilege being defeated, if it is not allowed to be invoked. In the same manner, the disclosure of
an information covered by the deliberative process privilege to a court arbitrator will defeat the policy
bases and purpose of the privilege.

DFA did not waive the privilege in arbitration proceedings under the Agreement. The Agreement
does not provide for the waiver of the deliberative process privilege by DFA. The Agreement only
provides that:

Section 20.02 None of the parties shall, at any time, before or after the expiration or sooner
termination of this Amended BOT Agreement, without the consent of the other party, divulge or
suffer or permit its officers, employees, agents or contractors to divulge to any person, other than
any of its or their respective officers or employees who require the same to enable them properly to
carry out their duties, any of the contents of this Amended BOT Agreement or any information
relating to the negotiations concerning the operations, contracts, commercial or financial
arrangements or affair[s] of the other parties hereto. Documents marked "CONFIDENTIAL" or
the like, providing that such material shall be kept confidential, and shall constitute prima
facieevidence that such information contained therein is subject to the terms of this provision.

Section 20.03 The restrictions imposed in Section 20.02 herein shall not apply to the
disclosure of any information:

xxxx
C. To a court arbitrator or administrative tribunal the course of proceedings before it to which
the disclosing party is party; x x x55 (Emphasis supplied)

Section 20.02 of the Agreement merely allows, with the consent of the other party, disclosure by a
party to a court arbitrator or administrative tribunal of the contents of the "Amended BOT Agreement
or any information relating to the negotiations concerning the operations, contracts, commercial
or financial arrangements or affair[s]of the other parties hereto." There is no express waiver of
information forming part of DFA's predecisional deliberative or decision-making process. Section
20.02 does not state that a party to the arbitration is compelled to disclose to the tribunal privileged
information in such party's possession.

On the other hand, Section 20.03 merely allows a party, if it chooses, without the consent of
the other party, to disclose to the tribunal privileged information in such disclosing party's
possession. In short, a party can disclose privileged information in its possession, even
without the consent of the other party, if the disclosure is to a tribunal. However, a party
cannot be compelled by the other party to disclose privileged information to the tribunal,
where such privileged information is in its possession and not in the possession of the party
seeking the compulsory disclosure.

Nothing in Section 20.03 mandates compulsory disclosure of privileged information. Section 20.03
merely states that "the restrictions imposed in Section 20.02," referring to the "consent of the other
party," shall not apply to a disclosure of privileged information by a party in possession of a
privileged information. This is completely different from compelling a party to disclose privileged
information in its possession against its own will.

Rights cannot be waived if it is contrary to law, public order, public policy, morals, or good customs,
or prejudicial to a third person with a right recognized by law. 56 There is a public policy involved in a
claim of deliberative process privilege - "the policy of open, frank discussion between subordinate
and chief concerning administrative action."57Thus, the deliberative process privilege cannot be
waived. As we have held in Akbayan v. Aquino, 58 the deliberative process privilege is closely related
to the presidential communications privilege and protects the public disclosure of information that
can compromise the quality of agency decisions:

Closely related to the "presidential communications" privilege is the deliberative process


privilegerecognized in the United States. As discussed by the U.S. Supreme Court in NLRB v.
Sears, Roebuck & Co, deliberative process covers documents reflecting advisory opinions,
recommendations and deliberations comprising part of a process by which governmental decisions
and policies are formulated. Notably, the privileged status of such documents rests, not on the need
to protect national security but, on the "obvious realization that officials will not communicate
candidly among themselves if each remark is a potential item of discovery and front page
news," the objective of the privilege being to enhance the quality of agency
decisions. (Emphasis supplied)

As a qualified privilege, the burden falls upon the government agency asserting the deliberative
process privilege to prove that the information in question satisfies both requirements - predecisional
and deliberative. 59 "The agency bears the burden of establishing the character of the decision, the
deliberative process involved, and the role played by the documents in the course of that
process."60 It may be overcome upon a showing that the discoverant's interests in disclosure of the
materials outweigh the government's interests in their confidentiality.61 "The determination of need
must be made flexibly on a case-by-case, ad hoc basis," and the "factors relevant to this balancing
include: the relevance of the evidence, whether there is reason to believe the documents may shed
light on government misconduct, whether the information sought is available from other sources and
can be obtained without compromising the government's deliberative processes, and the importance
of the material to the discoverant's case."62

In the present case, considering that the RTC erred in applying our ruling in Chavez v. Public
Estates Authority,63and both BCA's and DFA's assertions of subpoena of evidence and the
deliberative process privilege are broad and lack specificity, we will not be able to determine whether
the evidence sought to be produced is covered by the deliberative process privilege. The parties are
directed to specify their claims before the RTC and, thereafter, the RTC shall determine which
evidence is covered by the deliberative process privilege, if there is any, based on the standards
provided in this Decision. It is necessary to consider the circumstances surrounding the demand for
the evidence to determine whether or not its production is injurious to the consultative functions of
government that the privilege of non-disclosure protects.

WHEREFORE, we resolve to PARTIALLY GRANT the petition and REMAND this case to the
Regional Trial Court of Makati City, Branch 146, to determine whether the documents and records
sought to be subpoenaed are protected by the deliberative process privilege as explained in this
Decision. The Resolution dated 2 April 2014 issuing a Temporary Restraining Order is superseded
by this Decision.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

ARTURO D. BRION
Associate Justice

(on official leave)


JOSE CATRAL MENDOZA
MARIANO C. DEL CASTILLO*
Associate Justice
Associate Justice

MARVIC M.V.F. LEONEN


Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, I
certify that the conclusions in the above Decision had been reached in consultation before the case
was assigned to the writer of the opinion of the Court's Division.
MARIA LOURDES P.A. SERENO
Chief Justice

Footnotes

*
On official leave.

1
Rollo, pp. 17-45. Under Rule 45 of the 1997 Rules of Civil Procedure.

2
Id. at 46-49. Penned by Presiding Judge Encarnacion Jaja G. Moya.

3
Id. at 50.

4
Id. at 51-56.

5
Id. at 264.

6
Composed of Atty. Danilo L. Concepcion as chairman, and Dean Custodio O. Parlade and
Atty. Antonio P. Jamon, as members.

7
Rollo, pp. 83-84.

8
Id. at 68-80.

9
Id.at72-77.

10
433 Phil. 506 (2002).

11
Rollo, pp. 54-55.

12
Id. at 55.

13
The Arbitration Law or Republic Act No. 876, Section 22; Special ADR Rules, Rule 1.2.

14
Rules of Court, Rule 72, Section 2 provides: "In the absence of special provisions, the rules
provided for in ordinary actions shall be, as far as practicable, applicable in special
proceedings."

15
Department of Foreign Affairs v. Judge Falcon, 644 Phil. 105 (2010).

16
Korea Technologies Co., Ltd. v. Judge Lerma, 566 Phil. 1, 27 (2008).

17
IRR of RA 9285, Article 8.4.
18
Civil Code, Article 2046: "The appointment of arbitrators and the procedure for arbitration
shall be governed by the provisions of such rules of court as the Supreme Court shall
promulgate."

19
Special ADR Rules, Rule 24.1: "Considering its procedural character, the Special ADR
Rules shall be applicable to all pending arbitration, mediation or other ADR forms covered by
the ADR Act, unless the parties agree otherwise. The Special ADR Rules, however, may not
prejudice or impair vested rights in accordance with law."

20
IRR of RA 9285, Rules 4.27 and 5.27; Special ADR Rules, Rules 9.1 and 9.5.

21
Special ADR Rules, Rule 1.1 (g).

22
Special ADR Rules, Rules 9.9 and 19.1.

23
Special ADR Rules, Rules 19.12 and 19.26.

24
Special AD R Rules, Rules 19.36 and 19.37.

25
Article 33(1) of the 1976 UNCITRAL Arbitration Rules.

26
Korea Technologies Co., Ltd. v. Judge Lerma, supra note 16.

27
Section 14 of RA 876.

28
523 Phil. 374 (2006).

Department of Foreign Affairs v. Judge Falcon, supra note 15, citing Ateneo de Naga
29

University v. Manalo, 497 Phil. 635 (2005).

30
Supra note 10.

31
Rollo, pp. 54-55.

32
Supra note 10, at 531-532, 534.

33
Supra note 10.

34
Supra note 10.

35
Supra note 10.

In Re: Production of Court Records and Documents and the Attendance of Court Officials
36

and Employees as Witnesses under the Subpoenas of February 10, 2012 and the Various
Letters for the Impeachment Prosecution Panel Dated January 19 and 25, 2012, 14 February
2012 (unsigned Resolution).

37
580 Phil. 422 (2008).

38
421 U.S.132 (1975).
In Re: Production of Court Records and Documents and the Attendance of Court Officials
39

and Employees as Witnesses under the Subpoenas of February 10, 2012 and the Various
Letters for the Impeachment Prosecution Panel Dated January 19 and 25, 2012, supra note
35.

Vandelay Entm't, LLC v. Fallin, 2014 OK 109 (16 December 2014); City of Colorado
40

Springs v. White, 967 P.2d 1042 (1998).

41
102 F. Supp. 2d 6 (2000).

42
10 P.3d 572 (2002).

Pacific Coast Shellfish Growers Association v. United States Army Corps of


43

Engineers, 2016 U.S. Dist. LEXIS 68814 (W.D. Wash. 24 May 2016); Judicial Watch, Inc. v.
Department of Justice, 306 F. Supp. 2d 58 (D.D.C. 2004); Gwich 'in Steering Comm. v.
Office of the Governor, supra note 41; Judicial Watch of Florida v. Department of
Justice, supra note 40; City of Colorado Springs v. White, 967 P.2d 1042 (1998); Judicial
Watch v. Clinton, 880 F. Supp. 1 (D.D.C.1995); Strang v. Collyer, 710 F. Supp. 9 (D.D.C.
1989); Fulbright & Jaworski v. Dep't. of the Treasury, 545 F. Supp. 615 (D.D.C. 1982).

44
Id.

45
City of Colorado Springs v. White, 967 P.2d 1042 (1998).

46
Fulbright & Jaworski v. Dep 't. of Treasury, 545 F. Supp. 615 (D.D.C. 1982).

47
Supra.

48
710 F. Supp. 9 (D.D.C. 1989).

49
880 F. Supp. 1 (D.D.C.1995).

50
Supra note 36.

51
Supra note 10.

52
City of Colorado Springs v. White, supra note 45.

53
Judicial Watch v. Clinton, supra.

54
RA 9285, Section 32 provides that: "Domestic arbitration shall continue to be governed by
Republic Act No. 876, otherwise known as "The Arbitration Law" as amended by this
Chapter. x x x." RA 876, Section 29 provides that: "An appeal may be taken from an order
made in a proceeding under this Act, or from a judgment entered upon an award
through certiorari proceedings, but such appeals shall be limited to questions of law. The
proceedings upon such an appeal, including the judgment thereon shall be governed by the
Rules of Court in so far as they are applicable."

55
Rollo, pp. 264-265.
56
Civil Code, Article 6.

57
Kaiser Aluminum & Chemical Corp. v. United States, 157 F.Supp. 939 (1958).

58
Supra note 37, at 475.

59
Vandelay Entmt LLC v. Fallin, 2014 OK 109 (16 December 2014); City of Colorado Springs
v. White, supra note 45.

60
Strang v. Collyer, supra note 48.

61
City of Colorado Springs v. White, supra note 45.

62
Supra note 45.

63
Supra note 10.

SEPARATE CONCURRING OPINION

LEONEN, J.:

This Petition for Review on Certiorari1 assails the Resolution2 dated September 2, 2013 and the
Orders3 dated October 11, 2013 and January 8, 2014 of Branch 146 of the Regional Trial Court of
Makati City. The assailed judgments allowed the issuance of a subpoena duces tecum and
subpoena ad testificandum to compel the officers of the Department of Foreign Affairs to testify and
present documents to the Ad Hoc Arbitral Tribunal, which was constituted to resolve the issues
between the parties.

On September 29, 2000, the Department of Foreign Affairs issued a Notice of Award to BCA
International Corporation to undertake its Machine Readable Passport and Visa Project (Project).4 In
compliance with the Notice of Award, BCA International Corporation incorporated Philippine
Passport Corporation to implement the Project.5 On February 8, 2001, the Department of Foreign
Affairs and Philippine Passport Corporation entered into a Build-Operate-Transfer Agreement.6

However, Department of Justice Opinion No. 10 dated March 4, 2002 stated that Philippine Passport
Corporation had no personality to enter into the Build-Operate-Transfer Agreement since the Project
was awarded to BCA International Corporation, not to Philippine Passport Corporation.7 Thus, the
Department of Foreign Affairs and BCA International Corporation entered into an Amended Build-
Operate-Transfer Agreement8 dated April 5, 20029 to replace BCA International Corporation as the
party to the Agreement.10

During the implementation of the Project, dispute arose11 between the parties. The Department of
Foreign Affairs sought to terminate the BuildOperate-Transfer Agreement. 12 BCA International
Corporation opposed the termination and filed a Request for Arbitration before the Philippine Dispute
Resolution Center, Inc., invoking Section 19.02 of the Agreement:13

Section 19.02. Failure to Settle Amicably - If the Dispute cannot be settled amicably within ninety
(90) days by mutual discussion as contemplated under Section 19.01 herein, the Dispute shall be
settled with finality by an arbitrage tribunal operating under International Law, hereinafter referred to
as the "Tribunal," under the UNCITRAL Arbitration Rules contained in Resolution 31/98 adopted by
the United Nations General Assembly on December 15, 1976, and entitled "Arbitration Rules on the
United Nations Commission on the International Trade Law." The DFA and the BCA undertake to
abide by and implement the arbitration award. The place of arbitration shall be Pasay City,
Philippines, or such other place as may mutually be agreed upon by both parties. The arbitration
proceeding shall be conducted in the English language. 14 (Emphasis in the original)

On June 29, 2009, the Ad Hoc Tribunal15 was constituted to resolve the dispute. 16 On April 15, 2013,
the Ad Hoc Tribunal granted BCA International Corporation's motion to apply for a subpoena to
compel allegedly hostile witnesses. 17

On May 15, 2013, BCA International Corporation filed before Branch 146 of the Regional Trial Court
of Makati City a Petition 18 under Article 5.27(a)19 of the Implementing Rules and Regulations of
Republic Act No. 9285. 20 The Petition sought the issuance of a subpoena ad testificandum and a
subpoena duces tecum to the following witnesses and the documents within their custody:21

Witnesses Documents to be produced


1. Secretary of Foreign Affairs or his a. Request for Proposal dated
representative/s, specifically Undersecretary September 10, 1999 for the MRP/V
Franklin M. Ebdalin and Ambassador Belen Project;
F. Anota b. Notice of Award dated September 29,
2000 awarding the MRP/V Project
Company to implement the MRP/V
Project;
c. Department of Foreign Affairs
Machine Readable Passport and Visa
Project Build-Operate-Transfer
Agreement dated February 8, 2001;
d. Department of Foreign Affairs
Machine Readable Passport and Visa
Project Amended Build-Operate-
Transfer Agreement dated April 5,
2002;
e. Documents, records, papers and
correspondence between DFA and
BCA regarding the negotiations for
the contract of lease of the PNB
building, which was identified in the
Request for Proposal as the Central
Facility Site, and the failure of said
negotiations;
f. Documents, records, reports, studies,
papers and correspondence between
DFA and BCA regarding the search
for alternative Central Facility Site;
g. Documents, records, papers and
correspondence between DFA and
BCA regarding the latters submission
of the Project Master Plan (Phase
One of the MRP/V Project);
h. Documents, records, papers and
correspondence among DFA, DFAs
Project Planning Team, Questronix
Corporation, MRP/V Advisory Board
and other related government
agencies, and BCA regarding the
recommendation for the issuance of
the Certificate of Acceptance in favor
of BCA;
i. Certificate of Acceptance for Phase
One dated June 9, 2004 issued by
DFA;
j. Documents, records, papers and
correspondence between DFA and
BCA regarding the approval of the
Star Mall complex as the Central
Facility Site;
k. Documents, records, papers and
correspondence among DFA,
Questronix Corporation, MRP/V
Advisory Board and other related
government agencies, and BCA
regarding the recommendation for the
approval of the Stare Mall complex as
the Central Facility Site;
l. Documents, records, papers and
correspondence between DFA and
BCA regarding the DFAs request for
BCA to terminate its Assignment
Agreement with Philpass, including
BCAs compliance therewith;
m. Documents, records, papers and
correspondence between DFA and
BCA regarding the DFAs demand for
BCA to prove its financial capability to
implement the MRP/V Project,
including the compliance therewith by
BCA;
n. Documents, records, papers and
correspondence between DFA and
BCA regarding the DFAs attempt to
termiante the Amended BOT
Agreement, including BCAs
response to DFA and BCAs attempts
to mutually discuss the matter with
DFA;
o. Documents, records, papers and
correspondence among DFA and
MRP/V Advisory Board, DTI-BOT
Center, Department of Finance and
Commission on Audit regarding the
delays in the implementation of the
MRP/V Project, DFAs requirement
for BCA to prove its financial
capability, and the opinions of the
said government agencies in relation
to DFAs attempt to terminate the
Amended BOT Agreement; and
p. Other related documents, records,
papers and correspondence.

2. Secretary of Finance or his a. Documents, records, papers and


representative/s, specifically former correspondence between DFA and
Secretary of Finance Juanita D. Amatong Department of Finance regarding the
DFAs requirement for BCA to prove
its financial capability to implement
the MRP/V Project and its opinion
thereon;
b. Documents, records, papers and
correspondence between DFA and
DOF regarding BCAs compliance
with DFAs demand for BCA to further
prove its financial capability to
implement the MRP/V Project;
c. Documents, records, papers and
correspondence between DFA and
DOF regarding the delays in the
implementation of the MRP/V Project;
d. Documents, records, papers and
correspondence between DFA and
DOF regarding the DFAs attempted
termination of the Amended BOT
Agreement; and
e. Other related documents, records,
papers and correspondence.

3. Chairman of the Commission on Audit or a. Documents, records, papers and


her representative/s, specifically Ms. correspondence between DFA and
Iluminada M.V. Fabroa (Director IV) COA regarding the COAs conduct of
a sectoral performance audit on the
MRP/V Project;
b. Documents, records, papers and
correspondence between DFA and
COA regarding the delays in and its
recommendation to fast-track the
implementation of the MRP/V Project;
c. Documents, records, papers and
correspondence between DFA and
COA regarding COAs advice to
cancel the Assignment Agreement
between BCA and Philpass "for being
contrary to existing laws and
regulations and DOJ opinion";
d. Documents, records, papers and
correspondence between DFA and
COA regarding DFAs attempted
termination of the Amended BOT
Agreement; and
e. Other related documents, records,
papers and correspondence.

4. Executive Director or any officer or a. Documents, records, papers and


representative of the Department of Trade correspondence between DFA and
and Industry Build-Operate-Transfer Center, BOT Center regarding the delays in
specifically Messrs. Noel Eli B. Kintanar, the implementation of the MRP/V
Rafaelito H. Taruc and Luisito Ucab Project, including DFAs delay in the
issuance of the Certificate of
Acceptance for Phase One of the
MRP/V Project and in approving the
Central Facility Site at the Star Mall
complex;
b. Documents, records, papers and
correspondence between DFA and
BOT Center regarding BCAs
financial capability and the BOT
Centers opinion on DFAs demand
for BCA to further prove its financial
capability to implement the MRP/V
project;
c. Documents, records, papers and
correspondence between DFA and
BOT Center regarding the DFAs
attempt to terminate the Amended
BOT Agreement, including the BOT
Centers unsolicited advice dated
December 23, 2005 stating that the
issuance of the Notice of Termination
was "precipitate, and done without
first carefully ensuring that there were
sufficient grounds to warrant such an
issuance" and was "devoid of merit";
d. Documents, records, papers and
correspondence between DFA and
BOT Center regarding the DFAs
unwarrented refusal to approve
BCAs proposal to obtain the required
financing by allowing the entry of a
"strategic investor"; and
e. Other related documents, records,
papers and correspondence.
5. Chairman of the DFA MRP/V Advisory a. Documents, records, papers and
Board or his representative/s, specifically correspondence between DFA and
DFA Undersecretary Franklin M. Ebdalin and the MRP/V Advisory Board regarding
MRP/V Project Manager, specifically Atty. BCA[s] performance of its obligations
Voltaire Mauricio for Phase One of the MRP/V Project,
the MRP/V Advisory Boards
recommendation for the issuance of
the Certificate of Acceptance of
Phase One of the MRP/V Project and
its preparation of the draft of the
Certificate of Acceptance;
b. Documents, records, papers and
correspondence between DFA and
the MRP/V Advisory Board regarding
the latters recommendation for the
DFA to approve the Star Mall
complex as the Central Facility Site;
c. Documents, records, papers and
correspondence between DFA and
the MRP/V Advisory Board regarding
BCAs request to allow the
investment of S.F. Pass International
in Philpass;
d. Documents, records, papers and
correspondence between DFA and
the MRP/V Advisory Board regarding
BCAs financial capability and the
MRP/V Advisory Boards opinion on
DFAs demand for BCA to further
prove its financial capability to
implement the MRP/V Project;
e. Documents, records, papers and
correspondence between DFA and
the MRP/V Advisory Board regarding
the DFAs attempted termination of
the Amended BOT Agreement; and
f. Other related documents, records,
papers and correspondence.22

In its Comment23 dated July l, 2013, the Department of Foreign Affairs alleged that the information
sought from the proposed witnesses and documents were protected by the deliberative process
privilege. 24

On September 2, 2013, the Regional Trial Court issued the Resolution25 granting the Petition
pursuant to Rule 9.826of the Special Rules of Court on Alternative Dispute Resolution.27 The trial court
held that the information sought to be produced was no longer protected by the deliberative process
privilege.28 Citing Chavez v. Public Estates Authority,29 it found that the Department of Foreign Affairs
not only made a definite proposition but had already entered into a contract. 30 Thus, any evidence
sought to be produced was no longer covered under the privilege. 31
On September 6, 2013, the trial court issued a subpoena duces tecum and a subpoena ad
testificandum ordering the persons listed in the Petition to appear and bring the required documents
before the Ad Hoc Tribunal on October 14, 15, 16, and 17, 2013.32 On September 12, 2013, the
Department of Foreign Affairs filed a Motion to Quash Subpoena Duces Tecum and Ad
Testificandum,33 which was opposed34 by BCA International Corporation.

On October 11, 2013, the Regional Trial Court issued the Order35 denying the Motion to Quash since
it was actually a motion for reconsideration, which was prohibited under Rule 9.936 of the Special
Rules of Court on Alternative Dispute Resolution.37 The Department of Foreign Affairs moved for
reconsideration38 of this Order.

On October 14, 15, 16, and 17, 2013, Former Undersecretary of Foreign Affairs Franklin D. Ebdalin,
Project Manager Atty. Voltaire Mauricio, and Luisito Ubac of the Department of Trade and Industry
testified before the Ad Hoc Tribunal.39 On January 8, 2014, the trial court issued the Order40 denying
the Department of Foreign Affairs' Motion for Reconsideration on the ground that the appearance of
the witnesses before the Tribunal rendered the action moot.41

Aggrieved, the Department of Foreign Affairs filed before this Court a Petition for Review with Urgent
Prayer for the Issuance of a Temporary Restraining Order and/or Writ of Preliminary Injunction.42 In
the Resolution dated April 2, 2014, this Court issued a temporary restraining order enjoining the Ad
Hoc Tribunal from taking cognizance of the witnesses' testimonies.43

The Department of Foreign Affairs argues that the Regional Trial Court erred in applying the
Implementing Rules and Regulations of Republic Act No. 9285 and the Special Rules of Court on
Alternative Dispute Resolution, considering that both parties agreed to be bound by the Arbitration
Rules on the United Nations Commission on the International Trade Law (1976 UNCITRAL
Arbitration Rules).44 It further argues that the evidence sought by BCA International Corporation is
covered by the deliberative process privilege.45

BCA International Corporation, on the other hand, argues that this Court has no jurisdiction to
intervene in a private arbitration under (a) Article 546 of the UNCITRAL Model Law; (b) Article 5.447 of
the Implementing Rules and Regulations of Republic Act No. 9285; and (c) Rule 1.148 of the Special
Rules of Court on Alternative Dispute Resolution.49 BCA International Corporation insists that even if
this Court did have jurisdiction, the evidence sought from the Department of Foreign Affairs would
not be a state secret that, if revealed, would injure the public interest. 50 It argues that in any case,
the Department of Foreign Affairs waived its right to confidentiality pursuant to Section 20.03 of the
Amended

Build-Operate-Transfer Agreement. 51

From the arguments of the parties, the issues for this Court's resolution are:

First, which arbitration rules should apply to this case; and

Second, whether the evidence sought by BCA International Corporation from the Department of
Foreign Affairs is covered by the deliberative process privilege.

Both parties stipulated in the Amended Build-Operate-Transfer Agreement that in case of dispute,
the matter shall be brought to arbitration under the 1976 UNCITRAL Arbitration Rules, thus:
Section 19.02. Failure to Settle Amicably - If the Dispute cannot be settled amicably within ninety
(90) days by mutual discussion as contemplated under Section 19.01 herein, the Dispute shall be
settled with finality by an arbitrage tribunal operating under International Law, hereinafter referred to
as the "Tribunal," under the UNCITRAL Arbitration Rules contained in Resolution 31/98 adopted by
the United Nations General Assembly on December 15, 1976, and entitled "Arbitration Rules on the
United Nations Commission on the International Trade Law." The DFA and the BCA undertake to
abide by and implement the arbitration award. The place of arbitration shall be Pasay City,
Philippines, or such other place as may mutually be agreed upon by both parties. The arbitration
proceeding shall be conducted in the English

language.52 (Emphasis in the original)

Article 33(1) of the 1976 UNCITRAL Arbitration Rules mandates that the arbitration tribunal shall
apply the law designated by the parties. If the parties fail to designate the applicable law, the
applicable law shall be that which is determined by the conflict of laws:

Article 33

1. The arbitral tribunal shall apply the law designated by the parties as applicable to the substance of
the dispute. Failing such designation by the parties, the arbitral tribunal shall apply the law
determined by the conflict of laws rules which it considers applicable.

On the issue of which law applies in this case, I concur with the ponencia.

Since both parties are Filipino and did not designate the applicable law in the Agreement dated April
5, 2002, the applicable law is Republic Act No. 876.53 Section 14 of Republic Act No. 876 allows the
arbitrators to issue subpoenas at any time before the issuance of the award:

SEC. 14. Subpoena and subpoena duces tecum.-Arbitrators shall have the power to require any
person to attend a hearing as a witness. They shall have the power to subpoena witnesses and
documents when the relevancy of the testimony and the materiality thereof has been demonstrated
to the arbitrators. Arbitrators may also require the retirement of any witness during the testimony of
any other witness. All of the arbitrators appointed in any controversy must attend all the hearings in
that matter and hear all the allegations and proofs of the parties; but an award by the majority of
them is valid unless the concurrence of all of them is expressly required in the submission or
contract to arbitrate. The arbitrator or arbitrators shall have the power at any time, before rendering
the award, without prejudice to the rights of any party to petition the court to take measures to
safeguard and/or conserve any matter which is the subject of the dispute in arbitration.

Republic Act No. 9285,54 its Implementing Rules and Regulations,55 and the Special Rules on
Alternative Dispute Resolution56 may also apply since these are procedural laws that may be applied
retroactively. 57

II

The law recognizes the fundamental right of the People to be informed of matters of public concern.
Article 3, Section 7 of the Constitution provides:

ARTICLE III
Bill of Rights
....

SECTION 7. The right of the people to information on matters of public concern shall be recognized.
Access to official records, and to documents, and papers pertaining to official acts, transactions, or
decisions, as well as to government research data used as basis for policy development, shall be
afforded the citizen, subject to such limitations as may be provided by law.

Similarly, Article II, Section 28 of the Constitution provides:

ARTICLE II
Declaration of Principles and State Policies

....

SECTION 28. Subject to reasonable conditions prescribed by law, the State adopts and implements
a policy of full public disclosure of all its transactions involving public interest.

The right to information is not absolute and is "subject to limitations as may be provided by
law."58 One of the limitations imposed on the right to information is that of executive privilege.

In Almonte v. Vasquez,59 Former Associate Justice Vicente V. Mendoza introduced the concept of
governmental privilege against public disclosure:

At common law a governmental privilege against disclosure is recognized with respect to state
secrets bearing on military, diplomatic and similar matters. This privilege is based upon public
interest of such paramount importance as in and of itself transcending the individual interests of a
private citizen, even though, as a consequence thereof, the plaintiff cannot enforce his legal rights.

In addition, in the litigation over the Watergate tape subpoena in 1973, the U.S. Supreme Court
recognized the right of the President to the confidentiality of his conversations and correspondence,
which it likened to "the claim of confidentiality of judicial deliberations." Said the Court in United
States v. Nixon:

The expectation of a President to the confidentiality of his conversations and correspondence, like
the claim of confidentiality of judicial deliberations, for example, has all the values to which we
accord deference for the privacy of all citizens and, added to those values, is the necessity for
protection of the public interest in candid, objective, and even blunt or harsh opinions in Presidential
decision-making. A President and those who assist him must be free to explore alternatives in the
process of shaping policies and making decisions and to do so in a way many would be unwilling to
express except privately. These are the considerations justifying a presumptive privilege for
Presidential communications. The privilege is fundamental to the operation of the government and
inextricably rooted in the separation of powers under the Constitution. . . .

Thus, the Court for the first time gave executive privilege a constitutional status and a new name,
although not necessarily a new birth.

....

On the other hand, where the claim of confidentiality does not rest on the need to protect military,
diplomatic or other national security secrets but on a general public interest in the confidentiality of
his conversations, courts have declined to find in the Constitution an absolute privilege of the
President against a subpoena considered essential to the enforcement of criminal laws. 60

Executive privilege has been defined as "the power of the Government to withhold information from
the public, the courts, and the Congress"61 or "the right of the President and high-level executive
branch

officers to withhold information from Congress, the courts, and ultimately the public."62

Executive privilege has been further defined in Neri v. Senate Committee on Accountability of Public
Officers and Investigations, et al. 63 to encompass two (2) kinds of privileged information: (1)
presidential communications privilege and (2) deliberative process privilege. Thus:

[T]here are two (2) kinds of executive privilege: one is the presidential communications privilege and,
the other is the deliberative process privilege. The former pertains to "communications, documents
or other materials that reflect presidential decision-making and deliberations and that the President
believes should remain confidential." The latter includes "advisory opinions, recommendations and
deliberations comprising part of a process by which governmental decisions and policies are
formulated."

Accordingly, they are characterized by marked distinctions. Presidential communications privilege


applies to decision-making of the President while, the deliberative process privilege, to decision-
making of executive officials. The first is rooted in the constitutional principle of separation of power
and the President's unique constitutional role; the second on common law privilege. Unlike the
deliberative process privilege, the presidential communications privilege applies to documents in
their entirety, and covers final and post-decisional materials as well as pre-deliberative ones. As a
consequence, congressional or judicial negation of the presidential communications privilege is
always subject to greater scrutiny than denial of the deliberative process privilege. 64

Unlike state secrets, the purpose of the privilege is not for the protection of national security.65 The
purpose is to protect the free exchange of ideas between those tasked with decision-making in the
executive branch and to prevent public confusion before an agency has adopted a final policy
decision:

Courts have identified three purposes in support of the privilege: (1) it protects candid discussions
within an agency; (2) it prevents public confusion from premature disclosure of agency opinions
before the agency establishes final policy; and (3) it protects the integrity of an agency's decision;
the public should not judge officials based on information they considered prior to issuing their final
decisions. For the privilege to be validly asserted, the material must be pre-decisional and
deliberative. 66

Information is pre-decisional if no final decision has been made. On the other hand, information is
deliberative if it exposes the decision-making process of the agency:

A document is "predecisional" under the deliberative process privilege if it precedes, in temporal


sequence, the decision to which it relates. In other words, communications are considered
predecisional if they were made in the attempt to reach a final conclusion. A material is
"deliberative," on the other hand, if it reflects the give-and-take of the consultative process. The key
question in determining whether the material is deliberative in nature is whether disclosure of the
information would discourage candid discussion within the agency. If the disclosure of the
information would expose the government's decision-making process in a way that discourages
candid discussion among the decision-makers (thereby undermining the courts' ability to perform
their functions), the information is deemed privileged.67

Chavez does not mention deliberative process privilege per se. However, it differentiates the nature
and duration of governmental privilege from that of public disclosure:

Information, however, on on-going evaluation or review of bids or proposals being undertaken by the
bidding or review committee is not immediately accessible under the right to information. While the
evaluation or review is still on-going, there are "no official acts, transactions, or decisions" on the
bids or proposals. However, once the committee makes its official recommendation, there arises a
"definite proposition" on the part of the government. From this moment, the publics right to
information attaches, and any citizen can access all the non-proprietary information leading to such
definite proposition. In Chavez v. PCGG, the Court ruled as follows:

Considering the intent of the framers of the Constitution, we believe that it is incumbent upon the
PCGG and its officers, as well as other government representatives, to disclose sufficient public
information on any proposed settlement they have decided to take up with the ostensible owners
and holders of ill-gotten wealth. Such information, though, must pertain to definite propositions of the
government, not necessarily to intra-agency or inter-agency recommendations or communications
during the stage when common assertions are still in the process of being formulated or are in the
"exploratory" stage. There is need, of course, to observe the same restrictions on disclosure of
information in general, as discussed earlier such as on matters involving national security,
diplomatic or foreign relations, intelligence and other classified information.

...

There is no claim by PEA that the information demanded by petitioner is privileged information
rooted in the separation of powers. The information does not cover Presidential conversations,
correspondences, or discussions during closed-door Cabinet meetings which, like internal
deliberations of the Supreme Court and other collegiate courts, or executive sessions of either house
of Congress, are recognized as confidential. This kind of information cannot be pried open by a co-
equal branch of government. A frank exchange of exploratory ideas and assessments, .free .from
the glare of publicity and pressure by interested parties, is essential to protect the independence of
decision-making of those tasked to exercise Presidential, Legislative and Judicial power. This is not
the situation in the instant case.

We rule, therefore, that the constitutional right to information includes official information on on-going
negotiations before a final contract. The information, however, must constitute definite propositions
by the government and should not cover recognized exceptions like privileged information, military
and diplomatic secrets and similar matters affecting national security and public order. Congress has
also prescribed other limitations on the right to information in several legislations. 68 (Emphasis
supplied)

Thus, for the information to be covered by the deliberative process privilege, it must be (1) pre-
decisional and (2) deliberative. The privilege ends when the executive agency adopts a definite
proposition. Akbayan v. Aquino,69however, qualified that the privilege may continue even after a
definite proposition has been made if the information concerns matters of national security,
diplomatic relations, and public order or if public disclosure has been limited by law.70

III
In this case, the Regional Trial Court issued a subpoena duces tecum and a subpoena ad
testificandum on the basis that the deliberative process privilege does not apply since the
Department of Foreign Affairs already reached a definite proposition when it entered into the
contract.

Chavez defines definite proposition as an "official recommendation"71 or "official acts, transactions, or


decisions"72without need of a consummated contract:

Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission


understood that the right to information "contemplates inclusion of negotiations leading to the
consummation of the transaction." Certainly, a consummated contract is not a requirement for the
exercise of the right to information. Otherwise, the people can never exercise the right if no contract
is consummated, and if one is consummated, it may be too late for the public to expose its defects.

Requiring a consummated contract will keep the public in the dark until the contract, which may be
grossly disadvantageous to the government or even illegal, becomes a fait accompli. This negates
the State policy of full transparency on matters of public concern, a situation which the framers of the
Constitution could not have intended. Such a requirement will prevent the citizenry from participating
in the public discussion of any proposed contract, effectively truncating a basic right enshrined in the
Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by the
State of its avowed "policy of full disclosure of all its transactions involving public interest."

The right covers three categories of information which are "matters of public concern," namely: (1)
official records; (2) documents and papers pertaining to official acts, transactions and decisions; and
(3) government research data used in formulating policies. The first category refers to any document
that is part of the public records in the custody of government agencies or officials. The second
category refers to documents and papers recording, evidencing, establishing, confirming, supporting,
justifying or explaining official acts, transactions or decisions of government agencies or officials.
The third category refers to research data, whether raw, collated or processed, owned by the
government and used in formulating

government policies.

The information that petitioner may access on the renegotiation of the JVA includes evaluation
reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference and
other documents attached to such reports or minutes, all relating to the JVA. However, the right to
information does not compel PEA to prepare lists, abstracts, summaries and the like relating to the
renegotiation of the JVA. The right only affords access to records, documents and papers, which
means the opportunity to inspect and copy them. One who exercises the right must copy the
records, documents and papers at his expense. The exercise of the right is also subject to
reasonable regulations to protect the integrity of the public records and to minimize disruption to
government operations, like rules specifying when and how to conduct the inspection and copying.

The right to information, however, does not extend to matters recognized as privileged information
under the separation of powers. The right does not also apply to information on military and
diplomatic secrets, information affecting national security, and information on investigations of
crimes by law enforcement agencies before the prosecution of the accused, which courts have long
recognized as confidential. The right may also be subject to other limitations that Congress may
impose by law.73

The Department of Foreign Affairs claims that the definite propositions in this case concern
the implementation and the proposed termination of the Amended Build-Operate-Transfer
Agreement, and not necessarily the signing of the Agreement. 74 However, according to the
Certificate of Acceptance of Phase I,75 the Department of Foreign Affairs officially approved the
implementation of the Agreement. 76 The Department of Foreign Affairs also alleges that it was
"constrained to cancel the

agreement."77 Thus, the Department of Foreign Affairs made official recommendations concerning
the implementation and termination of the Agreement. It should cease to be covered by the
deliberative process

privilege.

There is a need to further explain what constitutes definite propositions within the context of
deliberative process privilege. Chavez did not require a consummated contract and held that even a
proposed contract could be considered a definite proposition if there were official acts, transactions,
and decisions that precipitated it. There is a lacuna, as in this case, as to what may constitute
definite propositions when a perfected contract is in the process of being consummated.

IV

The deliberative process privilege may have already been waived by the Department of Foreign
Affairs in the Amended Build-Operate-Transfer Agreement.

The deliberative process privilege is lesser in scope than the presidential communications privilege.
Its coverage and duration are limited. It stands to reason that the privilege may be waived unless
1wphi1

the information concerns national security, diplomatic relations, or public order.

In Sections 20.02 and 20.03 of the Amended Build-Operate-Transfer Agreement, the parties agreed
to keep information relating to negotiations confidential, subject to certain limitations:

Section 20.02. None of the parties shall, at any time, before or after the expiration or sooner
termination of this Amended BOT Agreement, without the consent of the other party, divulge or
suffer or permit its officers, employees, agents or contractors to divulge to any person, other than
any of its respective officers or employees who require the same to enable them to properly carry
out their duties, any of the contents of this Amended BOT Agreement or any information relating to
the negotiations concerning the operations, contracts, commercial or financial arrangements or affair
of the other parties hereto. Documents marked "CONFIDENTIAL" or the like, providing that such
material shall be kept confidential, and shall constitute prima facie evidence that such information
contained therein is subject to the terms of this provision.

Section 20.03. The restrictions imposed in Section 20.02 herein shall not apply to the disclosure of
any information:

A. Which may now or hereafter come into public knowledge otherwise than as a
result of a breach of an undertaking of confidentiality, or which is obtainable with no
more than reasonable diligence from sources other than any of the parties hereto;

B. Which is required by law to be disclosed to a [sic] any person who is authorized by


law to receive the same;

C. To a court arbitrator or administrative tribunal the course of proceedings before it


to which the disclosing party is party; or
D. To any consultants, banks, financiers, or legal or financial advisors of the
disclosing party.78(Emphasis supplied)

The Department of Foreign Affairs was a party to the Amended Build-Operate-Transfer Agreement.
While it stipulated that all matters concerning the contract were confidential, it similarly stipulated
that information could be disclosed to a court arbitrator. If it intended to exercise its privilege to

keep all matters concerning the Amended Build-Operate-Transfer Agreement including negotiations
concerning its implementation confidential, it should not have agreed to the exceptions in Section
20.03 of

the Agreement.

This stipulation, however, only affects disclosures made by officers of the Department of Foreign
Affairs. The Department of Finance and the Commission on Audit were not parties to the Amended
Build-OperateTransfer Agreement; hence, they could still validly invoke the deliberative process
privilege.

The deliberative process privilege may not always apply to arbitration proceedings under Republic
Act No. 9285.

The deliberative process privilege is a privilege that an officer of an executive department may
invoke to prevent public disclosure of any information that may compromise its decision-making
capability. Its purpose "rests most fundamentally on the belief that were agencies forced to operate
in a fishbowl, frank exchange of ideas and opinions would cease and the quality of administrative
decisions would consequently suffer."79 This is to prevent subjecting an agency's decision-making
process to public opinion before any definite policy action has been made.

Thus, the privilege may lose its purpose when the disclosure is not to the public. Here, the
Department of Foreign Affairs opposed the disclosure of information to the Ad Hoc Tribunal by
invoking the privilege, but the proceedings of the Ad Hoc Tribunal are not made public. Republic Act
No. 9285 requires confidentiality in all arbitration proceedings:

SEC. 23. Confidentiality of Arbitration Proceedings.-The arbitration proceedings, including the


records, evidence and the arbitral award, shall be considered confidential and shall not be published
except (1) with the consent of the parties, or (2) for the limited purpose of disclosing to the court of
relevant documents in cases where resort to the court is allowed herein: Provided, however, That
the court in which the action or the appeal is pending may issue a protective order to prevent or
prohibit disclosure of documents or information containing secret processes, developments,
research and other information where it is shown that the applicant shall be materially prejudiced by
an authorized disclosure thereof. (Emphasis in the original)

Thus, considering that the records of the Ad Hoc Tribunal are confidential in nature, there could not
have been any need for the Department of Foreign Affairs to invoke the deliberative process
privilege.

ACCORDINGLY, I vote to GRANT the Petition


MARVIC M.V.F. LEONEN
Associate Justice

Footnotes

1
Rollo, pp. 17-45.

2
Id. at 51-56. The Resolution was penned by Judge Encarnacion Jaja G. Moya of Branch
146 of the Regional Trial Court, Makati City.

3
Id. at 46-48 and 50. The Orders were penned by Judge Encarnacion Jaja G. Moya of
Branch 146 of the Regional Trial Court, Makati City.

4
Id. at 86.

5
Id.

6
Id. at 219-242, Annex 1 of Comment.