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    2 - GR No. 202050 Jul 25, 2016

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    Lizzy Way
    The Supreme Court ruled on a case involving a lease agreement between Keppel Philippines Holdings and Lusteveco for 11 hectares of land. The 25-year lease included an option for Keppel to purchase the land. When PNOC acquired the land, Keppel asserted its option to purchase. The Court affirmed the constitutionality of the original contract since it had a commercial purpose and Lusteveco retained ownership rights. The Court also upheld the validity of the purchase option, ruling that lack of separate consideration did not invalidate the offer, and that Keppel's expressed desire to exercise the option in 1994 created a contract for PNOC to sell the land.

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    2 - GR No. 202050 Jul 25, 2016

    Uploaded by

    Lizzy Way
    151 views15 pages
    The Supreme Court ruled on a case involving a lease agreement between Keppel Philippines Holdings and Lusteveco for 11 hectares of land. The 25-year lease included an option for Keppel to purchase the land. When PNOC acquired the land, Keppel asserted its option to purchase. The Court affirmed the constitutionality of the original contract since it had a commercial purpose and Lusteveco retained ownership rights. The Court also upheld the validity of the purchase option, ruling that lack of separate consideration did not invalidate the offer, and that Keppel's expressed desire to exercise the option in 1994 created a contract for PNOC to sell the land.

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    2 - GR No. 202050 Jul 25, 2016.ppt

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    The Supreme Court ruled on a case involving a lease agreement between Keppel Philippines Holdings and Lusteveco for 11 hectares of land. The 25-year lease included an option for Keppel to purchase the land. When PNOC acquired the land, Keppel asserted its option to purchase. The Court affirmed the constitutionality of the original contract since it had a commercial purpose and Lusteveco retained ownership rights. The Court also upheld the validity of the purchase option, ruling that lack of separate consideration did not invalidate the offer, and that Keppel's expressed desire to exercise the option in 1994 created a contract for PNOC to sell the land.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    151 views15 pages

    2 - GR No. 202050 Jul 25, 2016

    Uploaded by

    Lizzy Way
    The Supreme Court ruled on a case involving a lease agreement between Keppel Philippines Holdings and Lusteveco for 11 hectares of land. The 25-year lease included an option for Keppel to purchase the land. When PNOC acquired the land, Keppel asserted its option to purchase. The Court affirmed the constitutionality of the original contract since it had a commercial purpose and Lusteveco retained ownership rights. The Court also upheld the validity of the purchase option, ruling that lack of separate consideration did not invalidate the offer, and that Keppel's expressed desire to exercise the option in 1994 created a contract for PNOC to sell the land.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 15

    Philippine National Oil

    Company & PNOC DOCKYARD


    AND ENGINEERING
    CORPORATION v.Keppel
    Philippines Holdings
    G.R. No. 202050, July 25 2016
    FACTS
    Almost 40 years ago,
    respondent Keppel Philippines
    Holdings, Inc. entered into a lease
    agreement with Luzon Stevedoring
    Corporation (Lusteveco) covering a 11
    hectare land.

    The lease was for a period


    of 25 years.
    At the end of the 25
    year contract Keppel was given
    the absolute option to buy the
    land.
    Lusteveco warranted not to sell
    the land or assign its rights to
    the land for the duration of of
    the lease UNLESS with the
    prior written consent of Keppel
    When PNOC acquired
    the same land from
    Lusteveco, Keppel did not
    object so long as the
    assignment be annotated on
    PNOC's title.
    A year before the
    expiration of the lease, Keppel
    informed PNOC that at least
    60% of their shares are now
    owned by Filipinos and they are
    now ready to exercise their
    option to purchase. PNOC did not
    favorably respond.
    ISSUES
    First, the constitutionality of
    the Agreement

    Second, validity of the option


    contract
    RULING OF THE
    COURT
    On the first issue, the
    court AFFIRMS the
    constitutionality of the
    contract.
    Compared to a previous
    ruling Lui She, in the case at
    bar, there is a
    commercial/industrial purpose
    behind the agreement and
    Lusteveco was not completely
    denied on its ownership rights
    during the course of the lease.
    On the validity of the
    option contract, the court
    ruled that the absence of a
    seperate consideration
    does not invalidate the
    offer to buy.
    An option unsupported
    by a separate consideration
    stands as an unaccepted
    offer to buy (or sell)
    which, when properly
    accepted ripens into a
    contract to sell.
    As early as 1994, Keppel
    expressed their desire to
    exercise its option to buy the
    land.

    The offer having been duly


    accepted, a contract to sell the
    land ensued which Keppel can
    rightfully demand PNOC to comply
    with.

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