DFA vs FALCON

HI! Very long case plus naglibog ko sa facts, di ko kasabot. So pls excuse my lengthy digest. Anyway, the relevant ruling is the underlined texts sa end sa digest.

There is valid reason for the law to deny preliminary injunctive relief to those who seek to contest the governments termination of a national government contract. The only circumstance under which a court may grant injunctive relief is the existence of a matter of extreme urgency involving a constitutional issue, such that unless a TRO or injunctive writ is issued, grave injustice and irreparable injury will result.

The Philippine Department of Foreign Affairs (DFA) implemented its Machine Readable Passport and Visa Project (the MRPV Project) under the Build-Operate-andTransfer (BOT) scheme. Pursuant to the BOT Law, having found that BCA International Corporation (BCA) submitted the sole complying bid, direct negotiations were commenced between DFA and BCA for the MRPV Project. In compliance with the Notice of Award and the BOT Law, BCA incorporated a project company, the Philippine Passport Corporation (PPC) to undertake and implement the MRPV Project. Consequently, on February 8, 2001 a Build-Operate-Transfer Agreement (BOT Agreement) was entered into by the DFA and the PPC. Later, an Amended BOT Agreement was entered into by the DFA and BCA with the conformity of PPC. Then, an Assignment Agreement was executed by BCA and PPC, whereby BCA assigned and ceded its rights, title, interest and benefits arising from the Amended BOT Agreement to PPC.

On December 9, 2005, the DFA sent a Notice of Termination to BCA and PPC due to their alleged failure to submit proof of financial capability to complete the entire MRPV Project in accordance with the financial warranty under Section 5.02 (A) of the Amended BOT Agreement. On December 14, 2005, BCA sent a letter to the DFA demanding that it immediately reconsider and revoke its previous notice of termination, otherwise, BCA would be compelled to declare the DFA in default pursuant to the Amended BOT Agreement.

As the impasse remained unresolved, BCA filed a Request for Arbitration dated April 7, 2006 with the Philippine Dispute Resolution Center, Inc. (PDRCI), pursuant to Section 19.02 of the Amended BOT Agreement.

Thereafter, the DFA and the Bangko Sentral ng Pilipinas (BSP) entered into a Memorandum of Agreement for the latter to provide the former passports compliant with international standards. The BSP then solicited bids for the supply, delivery, installation and commissioning of a system for the production of Electronic Passport Booklets or e-Passports.

Thus, BCA filed a Petition for Interim Relief under Section 28 of the Alternative Dispute Resolution Act of 2004 (the ADR Act of 2004), with the Regional Trial Court of Pasig City. In that petition, BCA prayed for, among others, that the trial court grant interim relief to BCA prior to the constitution of the arbitral tribunal in the form an order temporarily restraining the DFA and BSP and their agents (i) from awarding a new contract to implement the MRPV Project, or any similar electronic passport or visa project; or (ii) if such contract has been awarded, from implementing such MRPV Project or similar projects until further orders from the court.

On January 23, 2007, the trial court ordered the issuance of a temporary restraining order restraining the DFA and the BSP and their agents from awarding a new contract to implement the MVPV Project or any similar electronic passport or visa project, or if such contract has been awarded, from implementing such or similar projects. This was then granted.

Hence, the DFA and the BSP filed the instant Petition for Certiorari and prohibition under Rule 65 of the Rules of Court with a prayer for the issuance of a temporary restraining order and/or a writ of preliminary injunction, imputing grave abuse of discretion on the trial court when it granted the writ of preliminary injunction.

CA granted the Office of the Solicitor Generals urgent motion for issuance of a TRO and/or writ of preliminary injunction, enjoining respondents from implementing the assailed Order dated 14 February 2007 and the Writ of Preliminary Injunction dated 23 February 2007, issued by respondent Judge Franco T. Falcon and from conducting further proceedings in said case until further orders from this Court.

Issues

I. Whether the trial court had jurisdiction to issue a writ of preliminary injunction in the present caseII. Whether the trial courts issuance of a writ of injunction was proper

HELD:

I. YES

In their petition, the DFA and the BSP argue that respondent Judge Falcon gravely abused his discretion amounting to lack or excess of jurisdiction when he issued the assailed orders, which effectively enjoined the bidding and/or implementation of the e-Passport Project. According to petitioners, this violated the clear prohibition under Republic Act No. 8975 regarding the issuance of TROs and preliminary injunctions against national government projects, such as the e-Passport Project.

It is indubitable that no court, aside from the Supreme Court, may enjoin a "national government project" unless the matter is one of extreme urgency involving a constitutional issue such that unless the act complained of is enjoined, grave injustice or irreparable injury would arise.

Republic Act No. 9285 is a general law applicable to all matters and controversies to be resolved through alternative dispute resolution methods. This law allows a Regional Trial Court to grant interim or provisional relief, including preliminary injunction, to parties in an arbitration case prior to the constitution of the arbitral tribunal. This general statute, however, must give way to a special law governing national government projects, Republic Act No. 8975 which prohibits courts, except the Supreme Court, from issuing TROs and writs of preliminary injunction in cases involving national government projects.

But the prohibition in Republic Act No. 8975 is inoperative in this case, since petitioners failed to prove that the e-Passport Project is national government project as defined therein. Thus, the trial court had jurisdiction to issue a writ of preliminary injunction against the e-Passport Project.

II. NO.Before a writ of preliminary injunction may be issued, there must be a clear showing by the complaint that there exists a right to be protected and that the acts against which the writ is to be directed are violative of the said right. It must be shown that the invasion of the right sought to be protected is material and substantial, that the right of complainant is clear and unmistakable and that there is an urgent and paramount necessity for the writ to prevent serious damage.

An injury is considered irreparable if it is of such constant and frequent recurrence that no fair and reasonable redress can be had therefor in a court of law, or where there is no standard by which their amount can be measured with reasonable accuracy

In BCAs Request for Arbitration with the PDRCI, it prayed to be awarded damages reasonably estimated at P50,000,000.00 representing lost business opportunities. All the purported damages that BCA claims to have suffered by virtue of the DFAs termination of the Amended BOT Agreement are plainly determinable in pecuniary terms and can be "reasonably estimated" according to BCAs own words. Thus the writ was not properly issued.

There is no doubt that the MRP/V Project is a project covered by the BOT Law and, in turn, considered a "national government project" under Republic Act No. 8795. Under Section 3(d) of that statute, trial courts are prohibited from issuing a TRO or writ of preliminary injunction against the government to restrain or prohibit the termination or rescission of any such national government project/contract.

The rationale for this provision is easy to understand. For if a project proponent that the government believes to be in default is allowed to enjoin the termination of its contract on the ground that it is contesting the validity of said termination, then the government will be unable to enter into a new contract with any other party while the controversy is pending litigation. Obviously, a courts grant of injunctive relief in such an instance is prejudicial to public interest since government would be indefinitely hampered in its duty to provide vital public goods and services in order to preserve the private proprietary rights of the project proponent. On the other hand, should it turn out that the project proponent was not at fault, the BOT Law itself presupposes that the project proponent can be adequately compensated for the termination of the contract. Although BCA did not specifically pray for the trial court to enjoin the termination of the Amended BOT Agreement and thus, there is no direct violation of Republic Act No. 8795, a grant of injunctive relief as prayed for by BCA will indirectly contravene the same statute.

Verily, there is valid reason for the law to deny preliminary injunctive relief to those who seek to contest the governments termination of a national government contract. The only circumstance under which a court may grant injunctive relief is the existence of a matter of extreme urgency involving a constitutional issue, such that unless a TRO or injunctive writ is issued, grave injustice and irreparable injury will result.

DFA and BSP is correct that the trial courts issuance of a writ of preliminary injunction, despite the lack of sufficient legal justification for the same, is tantamount to grave abuse of discretion.

NERWIN INDUSTRIES CORPORATION vs. PNOC-Energy Development Corporation

Accordingly, a Regional Trial Court (RTC) that ignores the express prohibition of Republic Act No. 8975 and issues a TRO or a writ of preliminary injunction or preliminary mandatory injunction against a government contract or project acts contrary to law.

Facts: In 1999, National Electrification Administration (NEA) published an invitation to pre-qualify and to bid for a contract known as IPB No. 80 for the supply and delivery of about 60,000 pieces of wood poles and 20,000 of cross-arms. Nerwin was one of the bidders The contract was awarded to him being the lowest bidder. However, NEAs board of directors passed a resolution reducing by 50% the material requirements for IPB 80 to which Nerwin protested. A losing bidder, Tri State and Pacific Synergy filed a complaint alleging the documents Nerwin submitted during the pre-qualification bid were falsified. Finding a way to nullify the bid, NEA sought the opinion of Govt Corporate Counsel who upheld the eligibility of Nerwin. NEA allegedly held negotiations with other bidders for IPB 80 contract. As a result, Nerwin filed a complaint with prayer of injunction which was grabted by RTC Manila. PNOC Energy Devt Corp issued an invitation to pre-qualify and bid for O-ILAW project. Nerwin filed a civil action in RTC alleging that it was an attempt to subject portions of IPB 80 to another bidding. He prayed for TRO to enjoin respondents to the proposed bidding. Respondents averred that this is in violation of a rule that government infrastructure are not subject to TROs. RTC granted TRO nevertheless. CA ruled in favor of respondents. Hence, this petition.

Issue: Whether or not the CA erred in dismissing the case on the basis of Rep. Act 8975 prohibiting the issuance of temporary restraining orders and preliminary injunctions, except if issued by the Supreme Court, on government projects.

Held: NO.The CAs decision was absolutely correct. The RTC gravely abused its discretion, firstly, when it entertained the complaint of Nerwin against respondents notwithstanding that Nerwin was thereby contravening the express provisions of Section 3 and Section 4 of Republic Act No. 8975 for its seeking to enjoin the bidding out by respondents of the O-ILAW Project; and, secondly, when it issued the TRO and the writ of preliminary prohibitory injunction.

Section 3 and Section 4 of Republic Act No. 8975 provide: Section 3. Prohibition on the Issuance of Temporary Restraining Orders, Preliminary Injunctions and Preliminary Mandatory Injunctions. No court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction or preliminary mandatory injunction against the government, or any of its subdivisions, officials or any person or entity, whether public or private, acting under the governments direction, to restrain, prohibit or compel the following acts:Xxx (b) Bidding or awarding of contract/project of the national government as defined under Section 2 hereof;xxx

Section 4. Nullity of Writs and Orders. - Any temporary restraining order, preliminary injunction or preliminary mandatory injunction issued in violation of Section 3 hereof is void and of no force and effect.

Based on the foregoing provisions, it can be seen that RTC should not have granted the writ. Its act was contrary to law.

It is of great relevance to mention that the presiding judge in this case, Judge Vicente A. Hidalgo, was in fact already found administratively liable for gross misconduct and gross ignorance of the law as the result of his issuance of a TRO and writ of preliminary prohibitory injunction in another case.

The exercise of discretion by the courts must be sound, that is, the issuance of the writ, though discretionary, should be upon the grounds and in the manner provided by law. When that is done, the exercise of sound discretion by the issuing court in injunctive matters must not be interfered with except when there is manifest abuse.

The decision of the RTC being void, has rendered any further treatment and discussion of Nerwins other submissions superfluous and unnecessary. So the court discussed on the nature and requisites of preliminary injunction just to reiterate and prevent errors such as in this case to happen.

CITY GOVERNMENT OF BAGUIO, HEREIN REPRESENTED BY CITY MAYOR REINALDO A. BAUTISTA, JR. vs. ATTY. BRIAN S. MASWENG

Lisod ang mga case ron dah. Di ko kibaw unsai one liner ani na case. Haha

Facts:

Previous case (G.R. No. 180206) :Petitioner City Government of Baguio, through its then Mayor, issued Demolition Order for the demolition of illegal structures that had been constructed on a portion of the Busol Watershed Reservation located at Aurora Hill, Baguio City, without the required building permits and in violation of Section 698 of the Revised Forestry Code.

A petition for injunction with prayer for temporary restraining order and writ of preliminary injunction was filed by Elvin Gumangan et al before the NCIP-CAR against the City of Baguio, The Anti-Squatting Committee, City Building and Architecture Office, and Public Order and Safety Office.

Herein respondent, Atty. Brain Masweng, the Regional Hearing Officer of the NCIP-CAR, issued two temporary restraining orders directing petitioner and all persons acting in its behalf from enforcing the demolition orders and demolition advices for a total period of 20 days. Subsequently, the NCIP-CAR, through respondent, granted the application for preliminary injunction.

On appeal, the Court of Appeals (CA) affirmed the injunctive writ issued by the NCIP-CAR against the demolition orders. The case was then elevated to this Court in G.R. No. 180206 entitled, "City Government of Baguio City v. Masweng." This Court rendered a Decision reversing and setting aside the ruling of the CA and dismissed NCIP Case.

Present Case:Thereafter, petitioner, through the Office of the Mayor, issued Demolition Advices against certain Alexander Ampaguey Sr., et al and advised them to voluntarily dismantle their structures built on the Busol Watershed.

Ampaguey Sr., et al filed a petition for injunction with urgent prayer for issuance of a temporary restraining order and writ of preliminary injunction before the NCIP against petitioner and the City Building and Architecture Office. They averred that they are all indigenous people who are possessors of residential houses and other improvements at Bayan Park and Aurora Hill, Baguio City. They sought to enjoin the enforcement of the demolition orders.

Respondent issued two separate 72-hour temporary restraining orders, restraining the implementation of the demolition advices and demolition orders. Respondent then issued a Writ of Preliminary Injunction in NCIP Case.

Hence, this petition asserting that the restraining orders and writs of preliminary injunction were issued in willful disregard, disobedience, defiance and resistance of this Courts Decision in G.R. No. 180206 which dismissed the previous injunction case. Petitioner contends that respondents act of enjoining the execution of the demolition orders and demolition advices is tantamount to allowing forum shopping since the implementation of the demolition orders over the structures in the Busol Forest Reservation had already been adjudicated and affirmed by this Court.

Respondent claims that he issued the restraining orders and writs of preliminary injunction because his jurisdiction was called upon to protect and preserve the rights of the petitioners (in the NCIP cases) who were undoubtedly members of the indigenous cultural communities/indigenous peoples. Also, that the orders and writs he issued did not disregard the earlier ruling of this Court in G.R. No. 180206.

ISSUE: Whether the respondent should be cited in contempt of court for issuing the subject temporary restraining orders and writs of preliminary injunction.

HELD:YES.

Said orders clearly contravene our ruling in G.R. No. 180206 that those owners of houses and structures covered by the demolition orders issued by petitioner are not entitled to the injunctive relief previously granted by respondent.

This Court ruled that although the NCIP has the authority to issue temporary restraining orders and writs of injunction, it was not convinced that private respondents were entitled to the relief granted by the Commission. Proclamation No. 15 does not appear to be a definitive recognition of private respondents ancestral land claim, as it merely identifies the Molintas and Gumangan families as claimants of a portion of the Busol Forest Reservation, but does not acknowledge vested rights over the same. Since it is required before the issuance of a writ of preliminary injunction that claimants show the existence of a right to be protected, this Court, in G.R. No. 180206, ultimately granted the petition of the City Government of Baguio and set aside the writ of preliminary injunction issued therein.

In the case at bar, petitioners and private respondents present the very same arguments and counter-arguments with respect to the writ of injunction against the fencing of the Busol Watershed Reservation. The same legal issues are thus being litigated in G.R. No. 180206 and in the case at bar, except that different writs of injunction are being assailed. In both cases, petitioners claim (1) that Atty. Masweng is prohibited from issuing temporary restraining orders and writs of preliminary injunction against government infrastructure projects; (2) that Baguio City is beyond the ambit of the IPRA; and (3) that private respondents have not shown a clear right to be protected. Private respondents, on the other hand, presented the same allegations in their Petition for Injunction, particularly the alleged recognition made under Proclamation No. 15 in favor of their ancestors. While res judicata does not apply on account of the different subject matters of the case at bar and G.R. No. 180206 (they assail different writs of injunction, albeit issued by the same hearing officer), we are constrained by the principle of stare decisis to grant the instant petition.

The principle of stare decisis enjoins adherence by lower courts to doctrinal rules established by this Court in its final decisions. It is based on the principle that once a question of law has been examined and decided, it should be deemed settled and closed to further argument.

Therefore, Respondent should be cited for contempt.