PM 004-2003

Requesting Entity: National Power Corporation

Issues Concern: NPC's Exercise of Option for the Supply and Delivery of Additional 2 x 65, 000 MT +/-7% Cargoes of Datong Coal under the NPC/ Shanzi Coal Supply Contract (Batch 3)



Applicability of E.O. 40 and its IRR to the Contract
It is a general rule that laws are to be given and are presumed to have a prospective
operation, in the absence of an express provision to the contrary or unless the contrary can be clearly implied. Thus insofar as there is neither an express provision nor a mere implication that the provisions of E.O. 40 and its IRR may be applied retroactively, we are of the opinion that the same cannot be made to apply to the implementation contracts entered into as a result of the application of prior procurement laws, rules and regulations.

Vested Right of NPC to Exercise the Option for the Supply of Additional Cost

To ascertain the right of NPC it must first be determined whether the exercise of the option for additional supply of coal as provided in the Contract is absolute, complete, unconditional, and independent of a contingency. Considering that Article III of the Contract categorically grants NPC the right to avail of option cargoes, it appears that the said right cannot be merely inchoate.

In fine, we confirm that E.O. 40 and its IRR, particularly its provisions on the nationality requirement, does not affect NPC’s right in the Contract to avail of option coal cargoes, considering that the said right is expressly provided in Article III of the same Contract.