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 case
II. 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 counterarguments 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.