G.R. No.

176657 September 1, 2010

DEPARTMENT OF FOREIGN AFFAIRS an !ANG"O SENTRA# NG PI#IPINAS, Petitioners,
vs.
$ON. FRAN%O T. FA#%ON, IN $IS %APA%IT& AS T$E PRESIDING '(DGE OF !RAN%$ 71 OF
T$E REGIONA# TRIA# %O(RT IN PASIG %IT& an !%A INTERNATIONA#
%ORPORATION, Respondents.
D E C I S I O N
#EONARDO)DE %ASTRO, J.:
Before the Court is a Petition for Certiorari and prohibition under Rule 65 of the Rules of Court ith a
pra!er for the issuan"e of a te#porar! restrainin$ order and%or a rit of preli#inar! in&un"tion filed b!
petitioners Depart#ent of 'orei$n (ffairs )D'(* and Ban$+o Sentral n$ Pilipinas )BSP*. Petitioners
pra! that the Court de"lare as null and void the Order
,
dated 'ebruar! ,-, .//0 of respondent 1ud$e
'ran"o 2. 'al"on )1ud$e 'al"on* in Civil Case No. 0,/03, hi"h $ranted the appli"ation for
preli#inar! in&un"tion filed b! respondent BC( International Corporation )BC(*. 4i+eise, petitioners
see+ to prevent respondent 1ud$e 'al"on fro# i#ple#entin$ the "orrespondin$ 5rit of Preli#inar!
In&un"tion dated 'ebruar! .6, .//0
.
issued pursuant to the aforesaid Order.
2he fa"ts of this "ase, as "ulled fro# the re"ords, are as follos7
Bein$ a #e#ber state of the International Civil (viation Or$ani8ation )IC(O*,
6
the Philippines has to
"o#pl! ith the "o##it#ents and standards set forth in IC(O Do"u#ent No. 36/6
-
hi"h re9uires
the IC(O #e#ber states to issue #a"hine readable travel do"u#ents ):R2Ds*
5
b! (pril ./,/.
2hus, in line ith the D'(;s #andate to i#prove the passport and visa issuan"e s!ste#, as ell as
the stora$e and retrieval of its related appli"ation re"ords, and pursuant to our $overn#ent;s IC(O
"o##it#ents, the D'( se"ured the approval of the President of the Philippines, as Chair#an of the
Board of the National E"ono#i" and Develop#ent (uthorit! )NED(*, for the i#ple#entation of the
:a"hine Readable Passport and <isa Pro&e"t )the :RP%< Pro&e"t* under the Build=Operate=and=
2ransfer )BO2* s"he#e, provided for b! Republi" ("t No. 6350, as a#ended b! Republi" ("t No.
00,> )the BO2 4a*, and its I#ple#entin$ Rules and Re$ulations )IRR*. 2hus, a Pre=9ualifi"ation,
Bids and (ards Co##ittee )PB(C* published an invitation to pre=9ualif! and bid for the suppl! of
the needed #a"hine readable passports and visas, and "ondu"ted the publi" biddin$ for the :RP%<
Pro&e"t on 1anuar! ,/, .///. Several bidders responded and BC( as a#on$ those that pre=
9ualified and sub#itted its te"hni"al and finan"ial proposals. On 1une .3, .///, the PB(C found
BC(;s bid to be the sole "o#pl!in$ bid? hen"e, it per#itted the D'( to en$a$e in dire"t ne$otiations
ith BC(. On even date, the PB(C re"o##ended to the D'( Se"retar! the aard of the :RP%<
Pro&e"t to BC( on a BO2 arran$e#ent.
In "o#plian"e ith the Noti"e of (ard dated Septe#ber .3, ./// and Se"tion ,,.6, Rule ,, of the
IRR of the BO2 4a,
6
BC( in"orporated a pro&e"t "o#pan!, the Philippine Passport Corporation
)PPC* to underta+e and i#ple#ent the :RP%< Pro&e"t.
On 'ebruar! >, .//,, a Build=Operate=2ransfer ($ree#ent
0
)BO2 ($ree#ent* beteen the D'( and
PPC as si$ned b! D'( ("tin$ Se"retar! 4auro 4. Ba&a, 1r. and PPC President Bonifa"io Su#billa.
@nder the BO2 ($ree#ent, the :RP%< Pro&e"t as defined as follos7
Section 1.02 MRP/V Project A refers to all the a"tivities and servi"es underta+en in the fulfill#ent of
the :a"hine Readable Passport and <isa Pro&e"t as defined in the Re9uest for Proposals )R'P*, a
"op! of hi"h is hereto atta"hed as (nneB (, in"ludin$ but not li#ited to pro&e"t finan"in$, s!ste#s
develop#ent, installation and #aintenan"e in the Philippines and 'orei$n Servi"e Posts )'SPs*,
trainin$ of D'( personnel, provision of all pro&e"t "onsu#ables )related to the produ"tion of
passports and visas, su"h as printer supplies, et".*, s"annin$ of appli"ation and "iti8enship
do"u#ents, "reation of data bases, issuan"e of #a"hine readable passports and visas, and site
preparation in the Central 'a"ilit! and Re$ional Consular Offi"es )RCOs* nationide.
>
On (pril 5, .//., for#er D'( Se"retar! 2eofisto 2. Cuin$ona and Bonifa"io Su#billa, this ti#e as
BC( President, si$ned an (#ended BO2 ($ree#ent
3
in order to refle"t the "han$e in the
desi$nation of the parties and to har#oni8e Se"tion ,,.6 ith Se"tion ,,.>
,/
of the IRR of the BO2
4a. 2he (#ended BO2 ($ree#ent as entered into b! the D'( and BC( ith the "onfor#it! of
PPC.
2he to BO2 ($ree#ents )the ori$inal version si$ned on 'ebruar! >, .//, and the a#ended
version si$ned (pril 5, .//.* "ontain substantiall! the sa#e provisions eB"ept for seven additional
para$raphs in the hereas "lauses and to ne provisions A Se"tion 3./5 on Perfor#an"e and
5arrant! Se"urities and Se"tion ./.,5 on :is"ellaneous Provisions. 2he to additional provisions
are 9uoted belo7
Section 9.05. 2he PPC has posted in favor of the D'( the perfor#an"e se"urit! re9uired for Phase
, of the :RP%< Pro&e"t and shall be dee#ed, for all intents and purposes, to be full "o#plian"e b!
BC( ith the provisions of this (rti"le 3.
B B B B
Section 20.15 It is "learl! and eBpressl! understood that BC( #a! assi$n, "ede and transfer all of
its ri$hts and obli$ations under this (#ended BO2 ($ree#ent to PPC, as full! as if PPC is the
ori$inal si$nator! to this (#ended BO2 ($ree#ent, provided hoever that BC( shall nonetheless be
&ointl! and severall! liable ith PPC for the perfor#an"e of all the obli$ations and liabilities under this
(#ended BO2 ($ree#ent.
,,
(lso #odified in the (#ended BO2 ($ree#ent as the Pro&e"t Co#pletion date of the :RP%<
Pro&e"t hi"h set the "o#pletion of the i#ple#entation phase of the pro&e"t ithin ,> to .6 #onths
fro# the date of effe"tivit! of the (#ended BO2 ($ree#ent as opposed to the previous period found
in the ori$inal BO2 ($ree#ent hi"h set the "o#pletion ithin ,> to .6 #onths fro# re"eipt of the
N2P )Noti"e to Pro"eed* in a""ordan"e ith the Pro&e"t :aster Plan.
On (pril ,., .//., an (ssi$n#ent ($ree#ent
,.
as eBe"uted b! BC( and PPC, hereb! BC(
assi$ned and "eded its ri$hts, title, interest and benefits arisin$ fro# the (#ended BO2 ($ree#ent
to PPC.
(s set out in (rti"le > of the ori$inal and the (#ended BO2 ($ree#ent, the :RP%< Pro&e"t as
divided into siB phases7
P*a+e 1. Pro,e-t P.ann/n0 P*a+e A 2he Pro&e"t Proponent DBC(E shall prepare detailed plans and
spe"ifi"ations in a""ordan"e ith (nneB ( of this D(#endedE BO2 ($ree#ent ithin three )6* #onths
fro# issuan"e of the N2P )Noti"e to Pro"eed* Dfro# the date of effe"tivit! of this (#ended BO2
($ree#entE. 2his phase shall be "onsidered "o#plete upon the revie, a""eptan"e and approval b!
the D'( of these plans and the resultin$ :aster Plan, in"ludin$ the :aster S"hedule, the business
pro"ess spe"ifi"ations, the a""eptan"e "riteria, a#on$ other plans.
B B B B
2he D'( #ust approve all detailed plans as a "ondition pre"edent to the issuan"e of the C(
DCertifi"ate of (""eptan"eE for Phase ,.
P*a+e 2. Imp.ementat/on o1 t*e MRP23 Pro,e-t at t*e %entra. Fa-/./t4 A 5ithin siB )6* #onths
fro# issuan"e of the C( for Phase ,, the PRO1EC2 PROPONEN2 DBC(E shall "o#plete the
i#ple#entation of the :RP%< Pro&e"t in the D'( Central 'a"ilit!, and establish the netor+ desi$n
beteen the D'( Central 'a"ilit!, the ten ),/* RCOs DRe$ional Consular Offi"esE and the ei$ht! )>/*
'SPs D'orei$n Servi"e PostsE.
B B B B
P*a+e 5. Imp.ementat/on o1 t*e MRP23 Pro,e-t at t*e Re0/ona. %on+6.ar O11/-e+ A 2his phase
represents the repli"ation of the s!ste#s as approved fro# the Central 'a"ilit! to the RCOs
throu$hout the "ountr!, as identified in the R'P DRe9uest for ProposalE. 2he approved s!ste#s are
those i#ple#ented, evaluated, and finall! approved b! D'( as des"ribed in Phase ,. 2he Pro&e"t
Proponent DBC(E ill be per#itted to be$in site preparation and the s"annin$ and database buildin$
operations in all offi"es as soon as the plans are a$reed upon and a""epted. 2his in"ludes site
preparation and database buildin$ operations in these Phase=6 offi"es.
5ithin siB )6* #onths fro# issuan"e of C( for Phase ., the Pro&e"t Proponent DBC(E shall "o#plete
site preparation and i#ple#entation of the approved s!ste#s in the ten ),/* RCOs, in"ludin$ a full!
fun"tional netor+ "onne"tion beteen all e9uip#ent at the Central 'a"ilit! and the RCOs.
P*a+e 7. F6.. Imp.ementat/on, /n-.6/n0 a.. Fore/0n Ser8/-e Po+t+ A 5ithin three )6* to ei$ht )>*
#onths fro# issuan"e of the C( for Phase=6, the Pro&e"t Proponent DBC(E shall "o#plete all
preparations and full! i#ple#ent the approved s!ste#s in the ei$ht! )>/* 'SPs, in"ludin$ a full!
fun"tional netor+ "onne"tion beteen all e9uip#ent at the Central 'a"ilit! and the 'SPs. @pon
satisfa"tor! "o#pletion of Phase -, a C( shall be issued b! the D'(.
P*a+e 5. In Ser8/-e P*a+e A Operation and #aintenan"e of the "o#plete :RP%< 'a"ilit! to provide
#a"hine readable passports and visas in all desi$nated lo"ations around the orld.
P*a+e 6. Tran+/t/on2T6rno8er A 2ransition%2urnover to the D'( of all operations and e9uip#ent, to
in"lude an orderl! transfer of onership of all hardare, appli"ation s!ste# softare and its sour"e
"ode and%or li"enses )sub&e"t to Se"tion 5./. DFE*, peripherals, leasehold i#prove#ents, ph!si"al
and "o#puter se"urit! i#prove#ents, (uto#ated 'in$erprint Identifi"ation S!ste#s, and all other
:RP%< fa"ilities shall "o##en"e at least siB )6* #onths prior to the end of the D(#endedE BO2
($ree#ent. 2he transition ill in"lude the trainin$ of D'( personnel ho ill be ta+in$ over the
responsibilities of s!ste# operation and #aintenan"e fro# the Pro&e"t Proponent DBC(E. 2he Pro&e"t
Proponent DBC(E shall bear all "osts related to this transfer.
,6
)5ords in bra"+ets appear in the
(#ended BO2 ($ree#ent*
2o pla"e #atters in the proper perspe"tive, it should be pointed out that both the D'( and BC(
i#pute brea"h of the (#ended BO2 ($ree#ent a$ainst ea"h other.
(""ordin$ to the D'(, dela!s in the "o#pletion of the phases per#eated the :RP%< Pro&e"t due to
the sub#ission of defi"ient do"u#ents as ell as intervenin$ issues re$ardin$ BC(%PPC;s supposed
finan"ial in"apa"it! to full! i#ple#ent the pro&e"t.
On the other hand, BC( "ontends that the D'( failed to perfor# its re"ipro"al obli$ation to issue to
BC( a Certifi"ate of (""eptan"e of Phase , ithin ,- or+in$ da!s of operation purportedl! re9uired
b! Se"tion ,-./- of the (#ended BO2 ($ree#ent. BC( beailed that it too+ al#ost three !ears for
the D'( to issue the said Certifi"ate alle$edl! be"ause ever! appointee to the position of D'(
Se"retar! anted to revie the aard of the pro&e"t to BC(. BC( further alle$ed that it as the
D'(;s refusal to approve the lo"ation of the D'( Central 'a"ilit! hi"h prevented BC( fro#
pro"eedin$ ith Phase . of the :RP%< Pro&e"t.
4ater, the D'( sou$ht the opinion of the Depart#ent of 'inan"e )DO'* and the Depart#ent of
1usti"e )DO1* re$ardin$ the appropriate le$al a"tions in "onne"tion ith BC(;s alle$ed dela!s in the
"o#pletion of the :RP%< Pro&e"t. In a 4etter dated 'ebruar! .,, .//5,
,-
the DO1 opined that the
D'( should issue a final de#and upon BC( to #a+e $ood on its obli$ations, spe"ifi"all! on the
arranties and responsibilities re$ardin$ the ne"essar! "apitali8ation and the re9uired finan"in$ to
"arr! out the :RP%< Pro&e"t. 2he DO1 used as basis for said re"o##endation, the 4etter dated (pril
,3, .//-
,5
of DO' Se"retar! 1uanita (#aton$ to then D'( Se"retar! Delia (lbert statin$, a#on$
others, that BC( #a! not be able to infuse #ore "apital into PPC to use for the "o#pletion of the
:RP%< Pro&e"t.
2hus, on 'ebruar! .., .//5, D'( sent a letter
,6
to BC(, throu$h its pro&e"t "o#pan! PPC, invo+in$
BC(;s finan"ial arrant! under Se"tion 5./.)(* of the (#ended BO2 ($ree#ent.
,0
2he D'( re9uired
BC( to sub#it )a* proof of ade9uate "apitali8ation )i.e., full or substantial pa!#ent of sto"+
subs"riptions*? )b* a ban+ $uarantee indi"atin$ the availabilit! of a "redit fa"ilit! of P0// #illion? and
)"* audited finan"ial state#ents for the !ears .//, to .//-.
In repl! to D'(;s letter, BC(, throu$h PPC, infor#ed the for#er of its position that its finan"ial
"apa"it! as alread! passed upon durin$ the pre9ualifi"ation pro"ess and that the (#ended BO2
($ree#ent did not "all for an! additional finan"ial re9uire#ents for the i#ple#entation of the :RP%<
Pro&e"t. Nonetheless, BC( sub#itted its finan"ial state#ents for the !ears .//, and .//. and
re9uested for additional ti#e ithin hi"h to "o#pl! ith the other finan"ial re9uire#ents hi"h the
D'( insisted on.
,>
(""ordin$ to the D'(, BC(;s finan"ial arrant! is a "ontinuin$ arrant! hi"h re9uires that it shall
have the ne"essar! "apitali8ation to finan"e the :RP%< Pro&e"t in its entiret! and not on a Gper
phaseG basis as BC( "ontends. Onl! upon suffi"ient proof of its finan"ial "apabilit! to "o#plete and
i#ple#ent the hole pro&e"t ill the D'(;s obli$ation to "hoose and approve the lo"ation of its
Central 'a"ilit! arise. 2he D'( asserted that its approval of a Central 'a"ilit! site as not #inisterial
and upon its revie, BC(;s proposed site for the Central 'a"ilit! as purportedl! una""eptable in
ter#s of se"urit! and fa"ilities. :oreover, the D'( alle$edl! re"eived "onfli"tin$ offi"ial letters and
noti"es
,3
fro# BC( and PPC re$ardin$ the true onership and "ontrol of PPC. 2he D'( i#plied that
the disputes a#on$ the shareholders of PPC and beteen PPC and BC( appeared to be part of the
reason for the ha#pered i#ple#entation of the :RP%< Pro&e"t.
BC(, in turn, sub#itted various letters and do"u#ents to prove its finan"ial "apabilit! to "o#plete
the :RP%< Pro&e"t.
./
Foever, the D'( "lai#ed these do"u#ents ere unsatisfa"tor! or of dubious
authenti"it!. 2hen on (u$ust ,, .//5, BC( ter#inated its (ssi$n#ent ($ree#ent ith PPC and
notified the D'( that it ould dire"tl! i#ple#ent the :RP%< Pro&e"t.
.,
BC( further "lai#s that the
ter#ination of the (ssi$n#ent ($ree#ent as upon the instan"e, or ith the "onfor#it!, of the D'(,
a "lai# hi"h the D'( disputed.
On De"e#ber 3, .//5, the D'( sent a Noti"e of 2er#ination
..
to BC( and PPC due to their alle$ed
failure to sub#it proof of finan"ial "apabilit! to "o#plete the entire :RP%< Pro&e"t in a""ordan"e ith
the finan"ial arrant! under Se"tion 5./.)(* of the (#ended BO2 ($ree#ent. 2he Noti"e states7
(fter a "areful evaluation and "onsideration of the #atter, in"ludin$ the reasons "ited in !our letters
dated :ar"h 6, :a! 6, and 1une ./, .//5, and upon the re"o##endation of the Offi"e of the
Soli"itor Ceneral )OSC*, the Depart#ent is of the vie that !our "ontinuin$ default in "o#pl!in$ ith
the re9uisite ban+ $uarantee and%or "redit fa"ilit!, despite repeated noti"e and de#and, is le$all!
un&ustified.
In li$ht of the fore$oin$ "onsiderations and upon the instru"tion of the Se"retar! of 'orei$n (ffairs,
the Depart#ent hereb! for#all! 2ER:IN(2E )si"* the Sub&e"t (#ended BO2 ($ree#ent dated 5
(pril .//5 )si"*
.6
effe"tive /3 De"e#ber .//5. 'urther, and as a "onse9uen"e of this ter#ination, the
Depart#ent for#all! DE:(ND )si"* that !ou pa! ithin ten ),/* da!s fro# re"eipt hereof, li9uidated
da#a$es e9uivalent to the "orrespondin$ perfor#an"e se"urit! bond that !ou had posted for the
:RP%< Pro&e"t.
Please be $uided a""ordin$l!.
On De"e#ber ,-, .//5, BC( sent a letter
.-
to the D'( de#andin$ that it i##ediatel! re"onsider and
revo+e its previous noti"e of ter#ination, otherise, BC( ould be "o#pelled to de"lare the D'( in
default pursuant to the (#ended BO2 ($ree#ent. 5hen the D'( failed to respond to said letter,
BC( issued its on Noti"e of Default dated De"e#ber .., .//5
.5
a$ainst the D'(, statin$ that if the
default is not re#edied ithin 3/ da!s, BC( ill be "onstrained to ter#inate the :RP%< Pro&e"t and
hold the D'( liable for da#a$es.
BC(;s re9uest for #utual dis"ussion under Se"tion ,3./, of the (#ended BO2 ($ree#ent
.6
as
purportedl! i$nored b! the D'( and left the dispute unresolved throu$h a#i"able #eans ithin 3/
da!s. Conse9uentl!, BC( filed its Re9uest for (rbitration dated (pril 0, .//6
.0
ith the Philippine
Dispute Resolution Center, In". )PDRCI*, pursuant to Se"tion ,3./. of the (#ended BO2 ($ree#ent
hi"h provides7
Section 19.02 Failure to Settle Amicably A If the Dispute "annot be settled a#i"abl! ithin ninet!
)3/* da!s b! #utual dis"ussion as "onte#plated under Se"tion ,3./, herein, the Dispute shall be
settled ith finalit! b! an arbitra$e tribunal operatin$ under International 4a, hereinafter referred to
as the GTribunalG, under the @NCI2R(4 (rbitration Rules "ontained in Resolution 6,%3> adopted b!
the @nited Nations Ceneral (sse#bl! on De"e#ber ,5, ,306, and entitled GArbitration Rules on the
United Nations Commission on the International Trade LawG. 2he D'( and the BC( underta+e to
abide b! and i#ple#ent the arbitration aard. 2he pla"e of arbitration shall be Pasa! Cit!,
Philippines, or su"h other pla"e as #a! #utuall! be a$reed upon b! both parties. 2he arbitration
pro"eedin$ shall be "ondu"ted in the En$lish lan$ua$e.
.>
(s alle$ed in BC(;s Re9uest for (rbitration, PDRCI is a non=sto"+, non=profit or$ani8ation "o#posed
of independent arbitrators ho operate under its on (d#inistrative Cuidelines and Rules of
(rbitration as ell as under the @nited Nations Co##ission on the International 2rade 4a
)@NCI2R(4* :odel 4a on International Co##er"ial (rbitration and other appli"able las and
rules. (""ordin$ to BC(, PDRCI "an a"t as an arbitration "enter fro# hose pool of a""redited
arbitrators both the D'( and BC( #a! sele"t their on no#inee to be"o#e a #e#ber of the arbitral
tribunal hi"h ill render the arbitration aard.
BC(;s Re9uest for (rbitration filed ith the PDRCI sou$ht the folloin$ reliefs7
,. ( &ud$#ent nullif!in$ and settin$ aside the Noti"e of 2er#ination dated De"e#ber 3, .//5
of Respondent DD'(E, in"ludin$ its de#and to Clai#ant DBC(E to pa! li9uidated da#a$es
e9uivalent to the "orrespondin$ perfor#an"e se"urit! bond posted b! Clai#ant DBC(E?
.. ( &ud$#ent )a* "onfir#in$ the Noti"e of Default dated De"e#ber .., .//5 issued b!
Clai#ant DBC(E to Respondent DD'(E? and )b* orderin$ Respondent DD'(E to perfor# its
obli$ation under the (#ended BO2 ($ree#ent dated (pril 5, .//. b! approvin$ the site of
the Central 'a"ilit! at the Star :all Co#pleB on Sha Boulevard, :andalu!on$ Cit!, ithin
five da!s fro# re"eipt of the (rbitral (ard? and
6. ( &ud$#ent orderin$ respondent DD'(E to pa! da#a$es to Clai#ant DBC(E, reasonabl!
esti#ated atP5/,///,///.// as of this date, representin$ lost business opportunities?
finan"in$ fees, "osts and "o##issions? travel eBpenses? le$al fees and eBpenses? and "osts
of arbitration, in"ludin$ the fees of the arbitrator%s.
.3
PDRCI, throu$h a letter dated (pril .6, .//6,
6/
invited the D'( to sub#it its (nser to the Re9uest
for (rbitration ithin 6/ da!s fro# re"eipt of said letter and also re9uested both the D'( and BC( to
no#inate their "hosen arbitrator ithin the sa#e period of ti#e.
Initiall!, the D'(, throu$h a letter dated :a! .., .//6,
6,
re9uested for an eBtension of ti#e to file its
anser, Githout pre&udi"e to &urisdi"tional and other defenses and ob&e"tions available to it under
the la.G Subse9uentl!, hoever, in a letter dated :a! .3, .//6,
6.
the D'( de"lined the re9uest for
arbitration before the PDRCI. 5hile it eBpressed its illin$ness to resort to arbitration, the D'(
pointed out that under Se"tion ,3./. of the (#ended BO2 ($ree#ent, there is no #ention of a
spe"ifi" bod! or institution that as previousl! authori8ed b! the parties to settle their dispute. 2he
D'( further "lai#ed that the arbitration of the dispute should be had before an ad hocarbitration
bod!, and not before the PDRCI hi"h has as its a""redited arbitrators, to of BC(;s "ounsels of
re"ord. 4i+eise, the D'( insisted that PPC, alle$edl! an indispensable part! in the instant "ase,
should also parti"ipate in the arbitration.
2he D'( then sou$ht the opinion of the DO1 on the Noti"e of 2er#ination dated De"e#ber 3, .//5
that it sent to BC( ith re$ard to the :RP%< Pro&e"t.
In DO1 Opinion No. 65 ).//6* dated :a! 6,, .//6,
66
the DO1 "on"urred ith the steps ta+en b! the
D'(, statin$ that there as basis in la and in fa"t for the ter#ination of the :RP%< Pro&e"t.
:oreover, the DO1 re"o##ended the i##ediate i#ple#entation of the pro&e"t )presu#abl! b! a
different "ontra"tor* at the soonest possible ti#e.
2hereafter, the D'( and the BSP entered into a :e#orandu# of ($ree#ent for the latter to provide
the for#er passports "o#pliant ith international standards. 2he BSP then soli"ited bids for the
suppl!, deliver!, installation and "o##issionin$ of a s!ste# for the produ"tion of Ele"troni" Passport
Boo+lets or e=Passports.
6-
'or BC(, the BSP;s invitation to bid for the suppl! and pur"hase of e=Passports )the e=Passport
Pro&e"t* ould onl! further dela! the arbitration it re9uested fro# the D'(. :oreover, this ne e=
Passport Pro&e"t b! the BSP and the D'( ould render BC(;s re#edies #oot inas#u"h as the e=
Passport Pro&e"t ould then be repla"in$ the :RP%< Pro&e"t hi"h BC( as "arr!in$ out for the
D'(.
2hus, BC( filed a Petition for Interi# Relief
65
under Se"tion .> of the (lternative Dispute Resolution
("t of .//- )R.(. No. 3.>5*,
66
ith the Re$ional 2rial Court )R2C* of Pasi$ Cit!, Bran"h 0,, presided
over b! respondent 1ud$e 'al"on. In that R2C petition, BC( pra!ed for the folloin$7
5FERE'ORE, BC( respe"tfull! pra!s that this Fonorable Court, before the "onstitution of the
arbitral tribunal in PDRCI Case No. 6/=.//6%BC', $rant petitioner interi# relief in the folloin$
#anner7
)a* upon filin$ of this Petition, i##ediatel! issue an order te#poraril! restrainin$
Respondents DD'( and BSPE, their a$ents, representatives, aardees, suppliers and assi$ns
)i* fro# aardin$ a ne "ontra"t to i#ple#ent the Pro&e"t, or an! si#ilar ele"troni" passport
or visa pro&e"t? or )ii* if su"h "ontra"t has been aarded, fro# i#ple#entin$ su"h Pro&e"t or
si#ilar pro&e"ts until further orders fro# this Fonorable Court?
)b* after noti"e and hearin$, issue a rit of preli#inar! in&un"tion orderin$ Respondents DD'(
and BSPE, their a$ents, representatives, aardees, suppliers and assi$ns to desist )i* fro#
aardin$ a ne "ontra"t to i#ple#ent the Pro&e"t or an! si#ilar ele"troni" passport or visa
pro&e"t? or )ii* if su"h "ontra"t has been aarded, fro# i#ple#entin$ su"h Pro&e"t or si#ilar
pro&e"ts, and to #aintain the status 9uo ante pendin$ the resolution on the #erits of BC(;s
Re9uest for (rbitration? and
)"* render &ud$#ent affir#in$ the interi# relief $ranted to BC( until the dispute beteen the
parties shall have been resolved ith finalit!.
BC( also pra!s for su"h other relief, &ust and e9uitable under the pre#ises.
60
BC( alle$ed, in support for its appli"ation for a 2e#porar! Restrainin$ Order )2RO*, that unless the
D'( and the BSP ere i##ediatel! restrained, the! ould pro"eed to underta+e the pro&e"t to$ether
ith a third part! to defeat the reliefs BC( sou$ht in its Re9uest for (rbitration, thus "ausin$ BC( to
suffer $rave and irreparable in&ur! fro# the loss of substantial invest#ents in "onne"tion ith the
i#ple#entation of the :RP%< Pro&e"t.
2hereafter, the D'( filed an Opposition )to the (ppli"ation for 2e#porar! Restrainin$ Order and%or
5rit of Preli#inar! In&un"tion* dated 1anuar! ,>, .//0,
6>
alle$in$ that BC( has no "ause of a"tion
a$ainst it as the "ontra"t beteen the# is for #a"hine readable passports and visas hi"h is not the
sa#e as the "ontra"t it has ith the BSP for the suppl! of ele"troni" passports. 2he D'( also
pointed out that the 'ilipino people and the $overn#ent;s international standin$ ould suffer $reat
da#a$e if a 2RO ould be issued to stop the e=Passport Pro&e"t. 2he D'( #ainl! an"hored its
opposition on Republi" ("t No. >305, hi"h prohibits trial "ourts fro# issuin$ a 2RO, preli#inar!
in&un"tion or #andator! in&un"tion a$ainst the biddin$ or aardin$ of a "ontra"t or pro&e"t of the
national $overn#ent.
On 1anuar! .6, .//0, after su##aril! hearin$ the parties; oral ar$u#ents on BC(;s appli"ation for
the issuan"e of a 2RO, the trial "ourt ordered the issuan"e of a 2RO restrainin$ the D'( and the
BSP, their a$ents, representatives, aardees, suppliers and assi$ns fro# aardin$ a ne "ontra"t
to i#ple#ent the Pro&e"t or an! si#ilar ele"troni" passport or visa pro&e"t, or if su"h "ontra"t has
been aarded, fro# i#ple#entin$ su"h or si#ilar pro&e"ts.
63
2he trial "ourt also set for hearin$
BC(;s appli"ation for preli#inar! in&un"tion.
Conse9uentl!, the D'( filed a :otion for Re"onsideration
-/
of the 1anuar! .6, .//0 Order. 2he BSP,
in turn, also sou$ht to lift the 2RO and to dis#iss the petition. In its @r$ent O#nibus :otion dated
'ebruar! ,, .//0,
-,
the BSP asserted that BC( is not entitled to an in&un"tion, as it does not have a
"lear ri$ht hi"h ou$ht to be prote"ted, and that the trial "ourt has no &urisdi"tion to en&oin the
i#ple#entation of the e=Passport Pro&e"t hi"h, the BSP alle$ed, is a national $overn#ent pro&e"t
under Republi" ("t No. >305.
In the hearin$s set for BC(;s appli"ation for preli#inar! in&un"tion, BC( presented as itnesses, :r.
Bonifa"io Su#billa, its President, :r. Celestino :er"ader, 1r. fro# the Independent <erifi"ation and
<alidation Contra"tor "o##issioned b! the D'( under the (#ended BO2 ($ree#ent, and D'(
(ssistant Se"retar! Do#in$o 4u"enario, 1r. as adverse part! itness.
2he D'( and the BSP did not present an! itness durin$ the hearin$s for BC(;s appli"ation for
preli#inar! in&un"tion. (""ordin$ to the D'( and the BSP, the trial "ourt did not have an! &urisdi"tion
over the "ase "onsiderin$ that BC( did not pa! the "orre"t do"+et fees and that onl! the Supre#e
Court "ould issue a 2RO on the biddin$ for a national $overn#ent pro&e"t li+e the e=Passport Pro&e"t
pursuant to the provisions of Republi" ("t No. >305. @nder Se"tion 6 of Republi" ("t No. >305, the
R2C "ould onl! issue a 2RO a$ainst a national $overn#ent pro&e"t if it involves a #atter of eBtre#e
ur$en"! involvin$ a "onstitutional issue, su"h that unless a 2RO is issued, $rave in&usti"e and
irreparable in&ur! ill arise.
2hereafter, BC( filed an O#nibus Co##ent Don Opposition and Supple#ental Opposition )2o the
(ppli"ation for 2e#porar! Restrainin$ Order and%or 5rit of Preli#inar! In&un"tion*E and Opposition
Dto :otion for Re"onsideration )2o the 2e#porar! Restrainin$ Order dated 1anuar! .6, .//0*E and
@r$ent O#nibus :otion D)i* 2o 4ift 2e#porar! Restrainin$ Order? and )ii* 2o Dis#iss the PetitionE
dated 1anuar! 6,, .//0.
-.
2he D'( and the BSP filed their separate Replies )to BC(;s O#nibus
Co##ent* dated 'ebruar! 3, .//0
-6
and 'ebruar! ,6, .//0,
--
respe"tivel!.
On 'ebruar! ,-, .//0, the trial "ourt issued an Order $rantin$ BC(;s appli"ation for preli#inar!
in&un"tion, to it7
5FERE'ORE, in vie of the above, the "ourt resolves that it has &urisdi"tion over the instant
petition and to issue the provisional re#ed! pra!ed for, and therefore, hereb! CR(N2S petitioner;s
DBC(;sE appli"ation for preli#inar! in&un"tion. (""ordin$l!, upon postin$ a bond in the a#ount of 2en
:illion Pesos )P,/,///,///.//*, let a rit of preli#inar! in&un"tion issue orderin$ respondents DD'(
and BSPE, their a$ents, representatives, aardees, suppliers and assi$ns to desist )i* fro# aardin$
a ne "ontra"t to i#ple#ent the pro&e"t or an! si#ilar ele"troni" passport or visa pro&e"t or )ii* if
su"h "ontra"t has been aarded fro# i#ple#entin$ su"h pro&e"t or si#ilar pro&e"ts.
2he #otion to dis#iss is denied for la"+ of #erit. 2he #otions for re"onsideration and to lift
te#porar! restrainin$ Order are no #oot and a"ade#i" b! reason of the eBpiration of the 2RO.
-5
On 'ebruar! ,6, .//0, BC( filed an (#ended Petition,
-6
herein para$raphs 6.6)b* and -.6 ere
#odified to add lan$ua$e to the effe"t that unless petitioners ere en&oined fro# aardin$ the e=
Passport Pro&e"t, BC( ould be deprived of its "onstitutionall!=prote"ted ri$ht to perfor# its
"ontra"tual obli$ations under the ori$inal and a#ended BO2 ($ree#ents ithout due pro"ess of
la. Subse9uentl!, on 'ebruar! .6, .//0, the D'( and the BSP re"eived the 5rit of Preli#inar!
In&un"tion dated 'ebruar! .6, .//0.
Fen"e, on :ar"h ., .//0, the D'( and the BSP filed the instant Petition for Certiorari
-0
and
prohibition under Rule 65 of the Rules of Court ith a pra!er for the issuan"e of a te#porar!
restrainin$ order and%or a rit of preli#inar! in&un"tion, i#putin$ $rave abuse of dis"retion on the
trial "ourt hen it $ranted interi# relief to BC( and issued the assailed Order dated 'ebruar! ,-,
.//0 and the rit of preli#inar! in&un"tion dated 'ebruar! .6, .//0.
2he D'( and the BSP later filed an @r$ent :otion for Issuan"e of a 2e#porar! Restrainin$ Order
and%or 5rit of Preli#inar! In&un"tion dated :ar"h 5, .//0.
->
On :ar"h ,., .//0, the Court re9uired BC( to file its "o##ent on the said petition ithin ten da!s
fro# noti"e and $ranted the Offi"e of the Soli"itor Ceneral;s ur$ent #otion for issuan"e of a 2RO
and%or rit of preli#inar! in&un"tion,
-3
thus7
(fter deliberatin$ on the petition for "ertiorari and prohibition ith te#porar! restrainin$ order and%or
rit of preli#inar! in&un"tion assailin$ the Order dated ,- 'ebruar! .//0 of the Re$ional 2rial Court,
Bran"h 0,, Pasi$ Cit!, in Civil Case No. 0,/03, the Court, ithout ne"essaril! $ivin$ due "ourse
thereto, resolves to re9uire respondents to CO::EN2 thereon )not to file a #otion to dis#iss* ithin
ten ),/* da!s fro# noti"e.
2he Court further resolves to CR(N2 the Offi"e of the Soli"itor Ceneral;s ur$ent #otion for issuan"e
of a te#porar! restrainin$ order and%or rit of preli#inar! in&un"tion dated /5 :ar"h .//0 and
ISS@E a 2E:POR(RH RES2R(ININC ORDER, as pra!ed for, en&oinin$ respondents fro#
i#ple#entin$ the assailed Order dated ,- 'ebruar! .//0 and the 5rit of Preli#inar! In&un"tion
dated .6 'ebruar! .//0, issued b! respondent 1ud$e 'ran"o 2. 'al"on in Civil Case No. 0,/03
entitled BC( International Corporation vs. Depart#ent of 'orei$n (ffairs and Ban$+o Sentral n$
Pilipinas, and fro# "ondu"tin$ further pro"eedin$s in said "ase until further orders fro# this Court.
BC( filed on (pril ., .//0 its Co##ent ith @r$ent :otion to 4ift 2RO,
5/
to hi"h the D'( and the
BSP filed their Repl! dated (u$ust ,-, .//0.
5,
In a Resolution dated 1une -, .//0,
5.
the Court denied BC(;s #otion to lift 2RO. BC( filed another
@r$ent O#nibus :otion dated (u$ust ,0, .//0, for the re"onsideration of the Resolution dated 1une
-, .//0, pra!in$ that the 2RO issued on :ar"h ,., .//0 be lifted and that the petition be denied.
In a Resolution dated Septe#ber ,/, .//0,
56
the Court denied BC(;s @r$ent O#nibus :otion and
$ave due "ourse to the instant petition. 2he parties ere dire"ted to file their respe"tive #e#oranda
ithin 6/ da!s fro# noti"e of the Court;s Septe#ber ,/, .//0 Resolution.
Petitioners D'( and BSP sub#it the folloin$ issues for our "onsideration7
Issues
I
5hether or not the respondent &ud$e $ravel! abused his dis"retion a#ountin$ to la"+ or eB"ess of
&urisdi"tion hen he issued the assailed order, hi"h effe"tivel! en&oined the i#ple#entation of the
e=passport pro&e"t == ( national $overn#ent pro&e"t under Republi" ("t No. >305.
II
5hether or not the respondent &ud$e a"ted ith $rave abuse of dis"retion a#ountin$ to la"+ or
eB"ess of &urisdi"tion in $rantin$ respondent BC(;s Ginteri# reliefG inas#u"h as7
)I* Respondent BC( has not established a "lear ri$ht that "an be prote"ted b! an in&un"tion?
and
)II* Respondent BC( has not shon that it ill sustain $rave and irreparable in&ur! that #ust
be prote"ted b! an in&un"tion. On the "ontrar!, it is the 'ilipino people, ho petitioners
prote"t, that ill sustain serious and severe in&ur! b! the in&un"tion.
5-
(t the outset, e dispose of the pro"edural ob&e"tions of BC( to the petition, to it7 )a* petitioners
did not follo the hierar"h! of "ourts b! filin$ their petition dire"tl! ith this Court, ithout filin$ a
#otion for re"onsideration ith the R2C and ithout filin$ a petition first ith the Court of (ppeals?
)b* the person ho verified the petition for the D'( did not have personal +noled$e of the fa"ts of
the "ase and hose appoint#ent to his position as hi$hl! irre$ular? and )"* the verifi"ation b! the
(ssistant Covernor and Ceneral Counsel of the BSP of onl! sele"ted para$raphs of the petition as
ith the purported intent to #islead this Court.
(lthou$h the dire"t filin$ of petitions for certiorari ith the Supre#e Court is dis"oura$ed hen
liti$ants #a! still resort to re#edies ith the loer "ourts, e have in the past overloo+ed the failure
of a part! to stri"tl! adhere to the hierar"h! of "ourts on hi$hl! #eritorious $rounds. :ost re"entl!,
e relaBed the rule on "ourt hierar"h! in the "ase of Ro9ue, 1r. v. Co##ission on
Ele"tions,
55
herein e held7
2he poli"! on the hierar"h! of "ourts, hi"h petitioners indeed failed to observe, is not an iron="lad
rule. 'or indeed the Court has full dis"retionar! poer to ta+e "o$ni8an"e and assu#e &urisdi"tion of
spe"ial "ivil a"tions forcertiorari and mandamus filed dire"tl! ith it for eB"eptionall! "o#pellin$
reasons or if arranted b! the nature of the issues "learl! and spe"ifi"all! raised in the
petition.
56
)E#phases ours.*
2he Court dee#s it proper to adopt a si#ilarl! liberal attitude in the present "ase in "onsideration of
the trans"endental i#portan"e of an issue raised herein. 2his is the first ti#e that the Court is
"onfronted ith the 9uestion of hether an infor#ation and "o##uni"ation te"hnolo$! pro&e"t, hi"h
does not "onfor# to our traditional notion of the ter# Ginfrastru"ture,G is "overed b! the prohibition on
the issuan"e of "ourt in&un"tions found in Republi" ("t No. >305, hi"h is entitled G(n ("t to Ensure
the EBpeditious I#ple#entation and Co#pletion of Covern#ent Infrastru"ture Pro&e"ts b! Prohibitin$
4oer Courts fro# Issuin$ 2e#porar! Restrainin$ Orders, Preli#inar! In&un"tions or Preli#inar!
:andator! In&un"tions, Providin$ Penalties for <iolations 2hereof, and for Other Purposes.G 2a+in$
into a""ount the "urrent trend of "o#puteri8ation and #oderni8ation of ad#inistrative and servi"e
s!ste#s of $overn#ent offi"es, depart#ents and a$en"ies, the resolution of this issue for the
$uidan"e of the ben"h and bar, as ell as the $eneral publi", is both ti#el! and i#perative.
(nent BC(;s "lai# that :r. Edsel 2. Custodio )ho verified the Petition on behalf of the D'(* did not
have personal +noled$e of the fa"ts of the "ase and as appointed to his position as ("tin$
Se"retar! under purportedl! irre$ular "ir"u#stan"es, e find that BC( failed to suffi"ientl! prove
su"h alle$ations. In an! event, e have previousl! held that GDdEependin$ on the nature of the
alle$ations in the petition, the verifi"ation #a! be based either purel! on personal +noled$e, or
entirel! on authenti" re"ords, or on both sour"es.G
50
2he alle$ed la"+ of personal +noled$e of :r.
Custodio )hi"h, as e alread! stated, BC( failed to prove* ould not ne"essaril! render the
verifi"ation defe"tive for he "ould have verified the petition purel! on the basis of authenti" re"ords.
(s for the assertion that the partial verifi"ation of (ssistant Covernor and Ceneral Counsel 1uan de
Iuni$a, 1r. as for the purpose of #isleadin$ this Court, BC( li+eise failed to addu"e eviden"e on
this point. Cood faith is ala!s presu#ed. Para$raph 6 of :r. Iuni$a;s verifi"ation indi"ates that his
partial verifi"ation is due to the fa"t that he is verif!in$ onl! the alle$ations in the petition pe"uliar to
the BSP. 5e see no reason to doubt that this is the true reason for his partial or sele"tive verifi"ation.
In su#, BC( failed to su""essfull! rebut the presu#ption that the offi"ial a"ts )of :r. Custodio and
:r. Iuni$a* ere done in $ood faith and in the re$ular perfor#an"e of offi"ial dut!.
5>
Even assu#in$
the verifi"ations of the petition suffered fro# so#e defe"t, e have ti#e and a$ain ruled that GDtEhe
ends of &usti"e are better served hen "ases are deter#ined on the #erits J after all parties are
$iven full opportunit! to ventilate their "auses and defenses J rather than on te"hni"alit! or so#e
pro"edural i#perfe"tions.G
53
In other ords, the Court #a! suspend or even disre$ard rules hen the
de#ands of &usti"e so re9uire.
6/
5e no "o#e to the substantive issues involved in this "ase.
On hether the trial "ourt had &urisdi"tion to issue a rit of preli#inar! in&un"tion in the present "ase
In their petition, the D'( and the BSP ar$ue that respondent 1ud$e 'al"on $ravel! abused his
dis"retion a#ountin$ to la"+ or eB"ess of &urisdi"tion hen he issued the assailed orders, hi"h
effe"tivel! en&oined the biddin$ and%or i#ple#entation of the e=Passport Pro&e"t. (""ordin$ to
petitioners, this violated the "lear prohibition under Republi" ("t No. >305 re$ardin$ the issuan"e of
2ROs and preli#inar! in&un"tions a$ainst national $overn#ent pro&e"ts, su"h as the e=Passport
Pro&e"t.
2he prohibition invo+ed b! petitioners is found in Se"tion 6 of Republi" ("t No. >305, hi"h reads7
Se"tion 6. Prohibition on the Issuan"e of 2e#porar! Restrainin$ Orders, Preli#inar! In&un"tions and
Preli#inar! :andator! In&un"tions. A No "ourt, eB"ept the Supre#e Court, shall issue an! te#porar!
restrainin$ order, preli#inar! in&un"tion or preli#inar! #andator! in&un"tion a$ainst the $overn#ent,
or an! of its subdivisions, offi"ials or an! person or entit!, hether publi" or private, a"tin$ under the
$overn#ent;s dire"tion, to restrain, prohibit or "o#pel the folloin$ a"ts7
)a* ("9uisition, "learan"e and develop#ent of the ri$ht=of=a! and%or site or lo"ation of an!
national $overn#ent pro&e"t?
)b* Biddin$ or aardin$ of "ontra"t%pro&e"t of the national $overn#ent as defined under
Se"tion . hereof?
)"* Co##en"e#ent, prose"ution, eBe"ution, i#ple#entation, operation of an! su"h "ontra"t
or pro&e"t?
)d* 2er#ination or res"ission of an! su"h "ontra"t%pro&e"t? and
)e* 2he underta+in$ or authori8ation of an! other laful a"tivit! ne"essar! for su"h
"ontra"t%pro&e"t.
2his prohibition shall appl! in all "ases, disputes or "ontroversies instituted b! a private part!,
in"ludin$ but not li#ited to "ases filed b! bidders or those "lai#in$ to have ri$hts throu$h su"h
bidders involvin$ su"h "ontra"t%pro&e"t. 2his prohibition shall not appl! hen the #atter is of eBtre#e
ur$en"! involvin$ a "onstitutional issue, su"h that unless a te#porar! restrainin$ order is issued,
$rave in&usti"e and irreparable in&ur! ill arise. 2he appli"ant shall file a bond, in an a#ount to be
fiBed b! the "ourt, hi"h bond shall a""rue in favor of the $overn#ent if the "ourt should finall!
de"ide that the appli"ant as not entitled to the relief sou$ht.
If after due hearin$ the "ourt finds that the aard of the "ontra"t is null and void, the "ourt #a!, if
appropriate under the "ir"u#stan"es, aard the "ontra"t to the 9ualified and innin$ bidder or order
a rebiddin$ of the sa#e, ithout pre&udi"e to an! liabilit! that the $uilt! part! #a! in"ur under
eBistin$ las.
'ro# the fore$oin$, it is indubitable that no "ourt, aside fro# the Supre#e Court, #a! en&oin a
Gnational $overn#ent pro&e"tG unless the #atter is one of eBtre#e ur$en"! involvin$ a "onstitutional
issue su"h that unless the a"t "o#plained of is en&oined, $rave in&usti"e or irreparable in&ur! ould
arise.
5hat then are the Gnational $overn#ent pro&e"tsG over hi"h the loer "ourts are ithout &urisdi"tion
to issue the in&un"tive relief as #andated b! Republi" ("t No. >305K
Se"tion .)a* of Republi" ("t No. >305 provides7
Se"tion .. Definition of Terms. A
)a* GNational $overn#ent pro&e"tsG shall refer to all "urrent and future national $overn#ent
infrastru"ture, en$ineerin$ or+s and servi"e "ontra"ts, in"ludin$ pro&e"ts underta+en b!
$overn#ent=oned and ="ontrolled "orporations, all pro&e"ts "overed b! Republi" ("t No. 6305, as
a#ended b! Republi" ("t No. 00,>, otherise +non as the Build=Operate=and=2ransfer 4a, and
other related and ne"essar! a"tivities, su"h as site a"9uisition, suppl! and%or installation of
e9uip#ent and #aterials, i#ple#entation, "onstru"tion, "o#pletion, operation, #aintenan"e,
i#prove#ent, repair and rehabilitation, re$ardless of the sour"e of fundin$.
(s petitioners the#selves pointed out, there are three t!pes of national $overn#ent pro&e"ts
enu#erated in Se"tion .)a*, to it7
)a* "urrent and future national $overn#ent infrastru"ture pro&e"ts, en$ineerin$ or+s and
servi"e "ontra"ts, in"ludin$ pro&e"ts underta+en b! $overn#ent=oned and A"ontrolled
"orporations?
)b* all pro&e"ts "overed b! R.(. No. 6305, as a#ended b! R.(. No. 00,>, or the Build=
Operate=and=2ransfer ) BO2* 4a? and
)"* other related and ne"essar! a"tivities, su"h as site a"9uisition, suppl! and%or installation
of e9uip#ent and #aterials, i#ple#entation, "onstru"tion, "o#pletion, operation,
#aintenan"e, i#prove#ent repair and rehabilitation, re$ardless of the sour"e of fundin$.
@nder Se"tion .)a* of the BO2 4a as a#ended b! Republi" ("t No. 00,>,
6,
private se"tor
infrastru"ture or develop#ent pro&e"ts are those nor#all! finan"ed and operated b! the publi" se"tor
but hi"h ill no be holl! or partl! i#ple#ented b! the private se"tor, /n-.6/n0 b6t not ./m/te
to, poer plants, hi$ha!s, ports, airports, "anals, da#s, h!dropoer pro&e"ts, ater suppl!,
irri$ation, tele"o##uni"ations, railroads and raila!s, transport s!ste#s, land re"la#ation pro&e"ts,
industrial estates or tonships, housin$, $overn#ent buildin$s, touris# pro&e"ts, #ar+ets,
slau$hterhouses, arehouses, solid aste #ana$e#ent, /n1ormat/on te-*no.o04 net9or:+ an
ataba+e /n1ra+tr6-t6re, edu"ation and health fa"ilities, seera$e, draina$e, dred$in$, and other
infrastru"ture and develop#ent pro&e"ts as #a! be authori8ed b! the appropriate a$en"!.
In "ontrast, Republi" ("t No. 3,>-,
6.
also +non as the Covern#ent Pro"ure#ent Refor# ("t,
defines infrastru"ture pro&e"ts in Se"tion 5)+* thereof in this #anner7
)+* Infrastructure Projects = in"lude the "onstru"tion, i#prove#ent, rehabilitation, de#olition, repair,
restoration or #aintenan"e of roads and brid$es, raila!s, airports, seaports, "o##uni"ation
fa"ilities, "ivil or+s "o#ponents of infor#ation te"hnolo$! pro&e"ts, irri$ation, flood "ontrol and
draina$e, ater suppl!, sanitation, seera$e and solid aste #ana$e#ent s!ste#s, shore
prote"tion, ener$!%poer and ele"trifi"ation fa"ilities, national buildin$s, s"hool buildin$s, hospital
buildin$s and other related "onstru"tion pro&e"ts of the $overn#ent. )E#phasis supplied.*
In the present petition, the D'( and the BSP "ontend that the biddin$ for the suppl!, deliver!,
installation and "o##issionin$ of a s!ste# for the produ"tion of Ele"troni" Passport Boo+lets, is a
national $overn#ent pro&e"t ithin the definition of Se"tion . of Republi" ("t No. >305. Petitioners
also point to the Senate deliberations on Senate Bill No. ./6>
66
)later Republi" ("t No. >305* hi"h
alle$edl! sho the le$islative;s intent to eBpand the s"ope and definition of national $overn#ent
pro&e"ts to "over not onl! the infrastru"ture pro&e"ts enu#erated in Presidential De"ree No. ,>,>,
but also future pro&e"ts that #a! li+eise be "onsidered national $overn#ent infrastru"ture pro&e"ts,
li+e the e=Passport Pro&e"t, to it7
Senator Ca!etano. B B B :r. President, the present bill, the Senate Bill No. ./6>, is a"tuall! an
i#prove#ent of P.D. No. ,>,> and definitel! not a repudiation of hat I have earlier said, as #!
$ood friend "learl! stated. But this is reall! an effort to i#prove both the s"ope and definition of the
ter# G$overn#ent pro&e"tsG and to ensure that loer "ourt &ud$es obe! and observe this prohibition
on the issuan"e of 2ROs on infrastru"ture pro&e"ts of the $overn#ent.
B B B B
Senator Ca!etano. 2hat is h!, :r. President, I did tr! to eBplain h! I ould a""ept the proposed
a#end#ent, #eanin$ the totalit! of the repeal of P.D. ,>,> hi"h is not found in the ori$inal version
of the bill, be"ause of #! earlier eBplanation that the definition of the ter# L$overn#ent infrastru"ture
pro&e"t; "overs all of those enu#erated in Se"tion , of P.D. No. ,>,>. (nd the reason for that, as e
+no, is e do not +no hat else "ould be "onsidered $overn#ent infrastru"ture pro&e"t in the neBt
,/ or ./ !ears.
B B B So, usin$ the 4atin #aBi# of eBpression unius est eB"lusion alterius, hi"h #eans hat is
eBpressl! #entioned is tanta#ount to an eBpress eB"lusion of the others, that is the reason e did
not in"lude parti"ularl! an enu#eration of "ertain a"tivities of the $overn#ent found in Se"tion , of
P.D. No. ,>,>. Be"ause to do that, it #a! be a $ood eB"use for a brilliant la!er to sa! L5ell, !ou
+no, sin"e it does not "over this parti"ular a"tivit!, er$o, the Re$ional 2rial Court #a! issue 2RO.
@sin$ the fore$oin$ dis"ussions to establish that the intent of the fra#ers of the la as to broaden
the s"ope and definition of national $overn#ent pro&e"ts and national infrastru"ture pro&e"ts, the D'(
and the BSP sub#it that the said s"ope and definition had sin"e evolved to in"lude the e=Passport
Pro&e"t. 2he! assert that the "on"ept of Ginfrastru"tureG #ust no refer to an! and all ele#ents that
provide support, fra#eor+, or stru"ture for a $iven s!ste# or or$ani8ation, in"ludin$ infor#ation
te"hnolo$!, su"h as the e=Passport Pro&e"t.
Interestin$l!, petitioners represented to the trial "ourt that the e=Passport Pro&e"t is a BO2 pro&e"t but
in their petition ith this Court, petitioners si#pl! "lai# that the e=Passport Pro&e"t is a national
$overn#ent pro&e"t under Se"tion . of Republi" ("t No. >305. 2his "ir"u#stan"e is si$nifi"ant, sin"e
rel!in$ on the "lai# that the e=Passport Pro&e"t is a BO2 pro&e"t, the trial "ourt ruled in this ise7
2he prohibition a$ainst issuan"e of 2RO and%or rit of preli#inar! in&un"tion under R( >305 applies
onl! to national $overn#ent infrastru"ture pro&e"t "overed b! the BO2 4a, )R( >305, Se" 6DbE in
relation to Se". .*.
2he national $overn#ent pro&e"ts "overed under the BO2 are enu#erated under Se". . of R(6350,
as a#ended, otherise +non as the BO2 4a. Notabl!, it in"ludes Ginfor#ation te"hnolo$!
netor+s and database infrastru"ture.G
In relation to infor#ation te"hnolo$! pro&e"ts, infrastru"ture pro&e"ts refer to the G"ivil or+s
"o#ponentsG thereof. )R.(. No. 3,>- D.//6E, Se". 5D"EMsi"N*.
6-
Respondent BSP;s re9uest for bid, for the suppl!, deliver!, installation and "o##issionin$ of a
s!ste# for the produ"tion of Ele"troni" Passport Boo+lets appears to be be!ond the s"ope of the
ter# G"ivil or+s.G Respondents did not present eviden"e to prove otherise.
65
)E#phases ours.*
'ro# the fore$oin$, it "an be $leaned that the trial "ourt a""epted BC(;s reasonin$ that, assu#in$
the e=Passport Pro&e"t is a pro&e"t under the BO2 4a, Se"tion . of the BO2 4a #ust be read in
"on&un"tion ith Se"tion 5)"* of Republi" ("t No. 3,>- or the Covern#ent Pro"ure#ent Refor# ("t
to the effe"t that onl! the "ivil or+s "o#ponent of infor#ation te"hnolo$! pro&e"ts are to be
"onsidered Ginfrastru"ture.G 2hus, onl! said "ivil or+s "o#ponent of an infor#ation te"hnolo$!
pro&e"t "annot be the sub&e"t of a 2RO or rit of in&un"tion issued b! a loer "ourt.
(lthou$h the Court finds that the trial "ourt had &urisdi"tion to issue the rit of preli#inar! in&un"tion,
e "annot uphold the theor! of BC( and the trial "ourt that the definition of the ter# Ginfrastru"ture
pro&e"tG in Republi" ("t No. 3,>- should be applied to the BO2 4a.
Se"tion 5 of Republi" ("t No. 3,>- prefa"es the definition of the ter#s therein, in"ludin$ the ter#
Ginfrastru"ture pro&e"t,G ith the folloin$ phrase7 G'or purposes of this ("t, the folloin$ ter#s or
ords and phrases shall #ean or be understood as follos B B B.G
2his Court has stated that the definition of a ter# in a statute is not "on"lusive as to the #eanin$ of
the sa#e ter# as used elsehere.
66
2his is evident hen the le$islative definition is eBpressl! #ade
for the purposes of the statute "ontainin$ su"h definition.
60
2here is no le$al or rational basis to appl! the definition of the ter# Ginfrastru"ture pro&e"tG in one
statute to another statute ena"ted !ears before and hi"h alread! defined the t!pes of pro&e"ts it
"overs. Rather, a readin$ of the to statutes involved ill readil! sho that there is a le$islative
intent to treat infor#ation te"hnolo$! pro&e"ts differentl! under the BO2 4a and the Covern#ent
Pro"ure#ent Refor# ("t.
In the BO2 4a as a#ended b! Republi" ("t No. 00,>, the national infrastru"ture and develop#ent
pro&e"ts "overed b! said la are enu#erated in Se"tion .)a* as follos7
SEC. .. Definition of Terms. = 2he folloin$ ter#s used in this ("t shall have the #eanin$s stated
belo7
)a* Private sector infrastructure or development projects = 2he $eneral des"ription of infrastru"ture or
develop#ent pro&e"ts nor#all! finan"ed and operated b! the publi" se"tor but hi"h ill no be
holl! or partl! i#ple#ented b! the private se"tor, in"ludin$ but not li#ited to, poer plants,
hi$ha!s, ports, airports, "anals, da#s, h!dropoer pro&e"ts, ater suppl!, irri$ation,
tele"o##uni"ations, railroads and raila!s, transport s!ste#s, land re"la#ation pro&e"ts, industrial
estates of tonships, housin$, $overn#ent buildin$s, touris# pro&e"ts, #ar+ets, slau$hterhouses,
arehouses, solid aste #ana$e#ent, infor#ation te"hnolo$! netor+s and database
infrastru"ture, edu"ation and health fa"ilities, seera$e, draina$e, dred$in$, and other infrastru"ture
and develop#ent pro&e"ts as #a! be authori8ed b! the appropriate a$en"! pursuant to this ("t.
Su"h pro&e"ts shall be underta+en throu$h "ontra"tual arran$e#ents as defined hereunder and su"h
other variations as #a! be approved b! the President of the Philippines.
'or the "onstru"tion sta$e of these infrastru"ture pro&e"ts, the pro&e"t proponent #a! obtain
finan"in$ fro# forei$n and%or do#esti" sour"es and%or en$a$e the servi"es of a forei$n and%or
'ilipino "ontra"tor7 Provided, 2hat, in "ase an infrastru"ture or a develop#ent fa"ilit!Os operation
re9uires a publi" utilit! fran"hise, the fa"ilit! operator #ust be a 'ilipino or if a "orporation, it #ust be
dul! re$istered ith the Se"urities and EB"han$e Co##ission and oned up to at least siBt! per"ent
)6/P* b! 'ilipinos7 Provided further, 2hat in the "ase of forei$n "ontra"tors, 'ilipino labor shall be
e#plo!ed or hired in the different phases of "onstru"tion here 'ilipino s+ills are
available7 Provided finall!, 2hat pro&e"ts hi"h ould have diffi"ult! in sour"in$ funds #a! be
finan"ed partl! fro# dire"t $overn#ent appropriations and%or fro# Offi"ial Develop#ent (ssistan"e
)OD(* of forei$n $overn#ents or institutions not eB"eedin$ fift! per"ent )5/P* of the pro&e"t "ost,
and the balan"e to be provided b! the pro&e"t proponent. )E#phasis supplied.*
( si#ilar provision appears in the Revised IRR of the BO2 4a as a#ended, to it7
SE%TION 1.5 ) DEFINITION OF TERMS
'or purposes of these I#ple#entin$ Rules and Re$ulations, the ter#s and phrases hereunder shall
be understood as follos7
B B B B
v. Pr/8ate Se-tor In1ra+tr6-t6re or De8e.opment Pro,e-t+ = 2he $eneral des"ription of
infrastru"ture or Develop#ent Pro&e"ts nor#all! finan"ed, and operated b! the publi" se"tor but
hi"h ill no be holl! or partl! finan"ed, "onstru"ted and operated b! the private se"tor, in"ludin$
but not li#ited to, poer plants, hi$ha!s, ports, airports, "anals, da#s, h!dropoer pro&e"ts, ater
suppl!, irri$ation, tele"o##uni"ations, railroad and raila!s, transport s!ste#s, land re"la#ation
pro&e"ts, industrial estates or tonships, housin$, $overn#ent buildin$s, touris# pro&e"ts, publi"
#ar+ets, slau$hterhouses, arehouses, solid aste #ana$e#ent, infor#ation te"hnolo$! netor+s
and database infrastru"ture, edu"ation and health fa"ilities, seera$e, draina$e, dred$in$, and other
infrastru"ture and develop#ent pro&e"ts as #a! otherise be authori8ed b! the appropriate
($en"!%4C@ pursuant to the ("t or these Revised IRR. Su"h pro&e"ts shall be underta+en throu$h
Contra"tual (rran$e#ents as defined herein, in"ludin$ su"h other variations as #a! be approved b!
the President of the Philippines.
B B B B
SE%TION 2.2 ) E#IGI!#E T&PES OF PRO'E%TS
2he Constru"tion, rehabilitation, i#prove#ent, better#ent, eBpansion, #oderni8ation, operation,
finan"in$ and #aintenan"e of the folloin$ t!pes of pro&e"ts hi"h are nor#all! finan"ed and
operated b! the publi" se"tor hi"h ill no be holl! or partl! finan"ed, "onstru"ted and operated
b! the private se"tor, in"ludin$ other infrastru"ture and develop#ent pro&e"ts as #a! be authori8ed
b! the appropriate a$en"ies, #a! be proposed under the provisions of the ("t and these Revised
IRR, provided hoever that su"h pro&e"ts have a "ost re"over! "o#ponent hi"h "overs at least
5/P of the Pro&e"t Cost, or as deter#ined b! the (pprovin$ Bod!7
B B B B
h. Infor#ation te"hnolo$! )I2* and data base infrastru"ture, in"ludin$ #oderni8ation of I2, $eo=spatial
resour"e #appin$ and "adastral surve! for resour"e a""ountin$ and plannin$. )@nders"orin$
supplied.*
@ndeniabl!, under the BO2 4a, herein the pro&e"ts are to be privatel! funded, the entire
infor#ation te"hnolo$! pro&e"t, in"ludin$ the "ivil or+s "o#ponent and the te"hnolo$i"al aspe"t
thereof, is "onsidered an infrastru"ture or develop#ent pro&e"t and treated si#ilarl! as traditional
Ginfrastru"tureG pro&e"ts. (ll the rules appli"able to traditional infrastru"ture pro&e"ts are also
appli"able to infor#ation te"hnolo$! pro&e"ts. In fa"t, the :RP%< Pro&e"t aarded to BC( under the
BO2 4a appears to in"lude both "ivil or+s )i.e., site preparation of the Central 'a"ilit!, re$ional
D'( offi"es and forei$n servi"e posts* and non="ivil or+s aspe"ts )i.e., develop#ent, installation
and #aintenan"e in the Philippines and forei$n servi"e posts of a "o#puteri8ed passport and visa
issuan"e s!ste#, in"ludin$ "reation of databases, stora$e and retrieval s!ste#s, trainin$ of
personnel and provision of "onsu#ables*.
In "ontrast, under Republi" ("t No. 3,>- or the Covern#ent Pro"ure#ent Refor# ("t, hi"h
"onte#plates pro&e"ts to be funded b! publi" funds, the ter# Ginfrastru"ture pro&e"tG as li#ited to
onl! the G"ivil or+s "o#ponentG of infor#ation te"hnolo$! pro&e"ts. 2he non="ivil or+s "o#ponent
of infor#ation te"hnolo$! pro&e"ts ould be treated as an a"9uisition of $oods or "onsultin$ servi"es
as the "ase #a! be.
2his li#ited definition of Ginfrastru"ture pro&e"tG in relation to infor#ation te"hnolo$! pro&e"ts under
Republi" ("t No. 3,>- is si$nifi"ant sin"e the IRR of Republi" ("t No. 3,>- has so#e provisions that
are parti"ular to infrastru"ture pro&e"ts and other provisions that are appli"able onl! to pro"ure#ent
of $oods or "onsultin$ servi"es.
6>
I#pli"itl!, the "ivil or+s "o#ponent of infor#ation te"hnolo$! pro&e"ts are sub&e"t to the provisions
on infrastru"ture pro&e"ts hile the te"hnolo$i"al and other "o#ponents ould be "overed b! the
provisions on pro"ure#ent of $oods or "onsultin$ servi"es as the "ir"u#stan"es #a! arrant.
5hen Con$ress adopted a li#ited definition of hat is to be "onsidered Ginfrastru"tureG in relation to
infor#ation te"hnolo$! pro&e"ts under the Covern#ent Pro"ure#ent Refor# ("t, le$islators are
presu#ed to have ta+en into a""ount previous las "on"ernin$ infrastru"ture pro&e"ts )the BO2 4a
and Republi" ("t No. >305* and deliberatel! adopted the li#ited definition. 5e "an further presu#e
that Con$ress had ritten into la a different treat#ent for infor#ation te"hnolo$! pro&e"ts finan"ed
b! publi" funds vis=a=vis privatel! funded pro&e"ts for a valid le$islative purpose.
2he idea that the definitions of ter#s found in the Covern#ent Pro"ure#ent Refor# ("t ere not
#eant to be applied to pro&e"ts under the BO2 4a is further reinfor"ed b! the folloin$ provision in
the IRR of the Covern#ent Pro"ure#ent Refor# ("t7
Se-t/on 1. P6rpo+e an Genera. %o8era0e
2his I#ple#entin$ Rules and Re$ulations )IRR* Part (, hereinafter "alled GIRR=(,G is pro#ul$ated
pursuant to Se"tion 05 of Republi" ("t No. 3,>- )R.(. 3,>-*, otherise +non as the GCovern#ent
Pro"ure#ent Refor# ("tG )CPR(*, for the purpose of pres"ribin$ the ne"essar! rules and
re$ulations for the #oderni8ation, standardi8ation, and re$ulation of the pro"ure#ent a"tivities of the
$overn#ent. 2his IRR=( shall "over all full! do#esti"all!=funded pro"ure#ent a"tivities fro#
pro"ure#ent plannin$ up to "ontra"t i#ple#entation and ter#ination, eB"ept for the folloin$7
a* ("9uisition of real propert! hi"h shall be $overned b! Republi" ("t No. >30- )R.(.
>30-*, entitled G(n ("t to 'a"ilitate the ("9uisition of Ri$ht=of=5a! Site or 4o"ation for
National Covern#ent Infrastru"ture Pro&e"ts and for Other Purposes,G and other appli"able
las? and
b* Private se"tor infrastru"ture or develop#ent pro&e"ts and other pro"ure#ent "overed b!
Republi" ("t No. 00,> )R.(. 00,>*, entitled G(n ("t (uthori8in$ the 'inan"in$, Constru"tion,
Operation and :aintenan"e of Infrastru"ture Pro&e"ts b! the Private Se"tor, and for Other
Purposes,G as a#ended7 Provided however, 2hat for the portions finan"ed b! the
Covern#ent, the provisions of this IRR=( shall appl!.
2he IRR=B for forei$n=funded pro"ure#ent a"tivities shall be the sub&e"t of a subse9uent issuan"e.
)E#phases supplied.*
2he fore$oin$ provision in the IRR "an be ta+en as an ad#inistrative interpretation that the
provisions of Republi" ("t No. 3,>- are inappli"able to a BO2 pro&e"t eB"ept onl! insofar as su"h
portions of the BO2 pro&e"t that are finan"ed b! the $overn#ent.
2a+in$ into a""ount the different treat#ent of infor#ation te"hnolo$! pro&e"ts under the BO2 4a
and the Covern#ent Pro"ure#ent Refor# ("t, petitioners; "ontention the trial "ourt had no
&urisdi"tion to issue a rit of preli#inar! in&un"tion in the instant "ase ould have been "orre"t if the
e=Passport Pro&e"t as a pro&e"t under the BO2 4a as the! represented to the trial "ourt.
Foever, petitioners presented no proof that the e=Passport Pro&e"t as a BO2 pro&e"t. On the
"ontrar!, eviden"e addu"ed b! both sides tended to sho that the e=Passport Pro&e"t as a
pro"ure#ent "ontra"t under Republi" ("t No. 3,>-.
2he BSP;s on=line re9uest for eBpression of interest and to bid for the e=Passport Pro&e"t
63
fro# the
BSP ebsite and the nespaper "lippin$
0/
of the sa#e re9uest eBpressl! stated that GDtEhe to sta$e
biddin$ pro"edure under Se"tion 6/.- of the I#ple#entin$ Rules and Re$ulation )si"* Part=( of
Republi" ("t No. 3,>- relative to the biddin$ and aard of the "ontra"t shall appl!.G Durin$ the
testi#on! of D'( (ssistant Se"retar! Do#in$o 4u"enario, 1r. before the trial "ourt, he ad#itted that
the e=Passport Pro&e"t is a BSP pro"ure#ent pro&e"t and that it is the GBSP that ill pa! the
suppliers.G
0,
In petitioners; :anifestation dated 1ul! .3, .//>
0.
and the Erratu#
06
thereto, petitioners
infor#ed the Court that a "ontra"t Gfor the suppl! of a "o#plete pa"+a$e of s!ste#s desi$n,
te"hnolo$!, hardare, softare, and peripherals, #aintenan"e and te"hni"al support, e"overs and
datapa$e se"urit! la#inates for the "entrali8ed produ"tion and personali8ation of :a"hine Readable
Ele"troni" PassportG as aarded to 'ran"ois Charles Oberthur 'idu"iaire. In the Noti"e of (ard
dated 1ul! ., .//>
0-
atta"hed to petitioners; pleadin$, it as stated that the failure of the
"ontra"tor%supplier to sub#it the re9uired perfor#an"e bond ould be suffi"ient $round for the
i#position of ad#inistrative penalt! under Se"tion 63 of the IRR=( of Republi" ("t No. 3,>-.
Bein$ a $overn#ent pro"ure#ent "ontra"t under Republi" ("t No. 3,>-, onl! the "ivil or+s
"o#ponent of the e=Passport Pro&e"t ould be "onsidered an infrastru"ture pro&e"t that #a! not be
the sub&e"t of a loer "ourt=issued rit of in&un"tion under Republi" ("t No. >305.
Could the e=Passport Pro&e"t be "onsidered as Gen$ineerin$ or+s or a servi"e "ontra"tG or as
Grelated and ne"essar! a"tivitiesG under Republi" ("t No. >305 hi"h #a! not be en&oinedK
5e hold in the ne$ative. @nder Republi" ("t No. >305, a Gservi"e "ontra"tG refers to Ginfrastru"ture
"ontra"ts entered into b! an! depart#ent, offi"e or a$en"! of the national $overn#ent ith private
entities and non$overn#ent or$ani8ations for servi"es related or in"idental to the fun"tions and
operations of the depart#ent, offi"e or a$en"! "on"erned.G On the other hand, the phrase Gother
related and ne"essar! a"tivitiesG obviousl! refers to a"tivities related to a $overn#ent infrastru"ture,
en$ineerin$ or+s, servi"e "ontra"t or pro&e"t under the BO2 4a. In other ords, to be "onsidered
a servi"e "ontra"t or related a"tivit!, petitioners #ust sho that the e=Passport Pro&e"t is an
infrastru"ture pro&e"t or ne"essaril! related to an infrastru"ture pro&e"t. 2his, petitioners failed to do
for the! sa fit not to present an! eviden"e on the details of the e=Passport Pro&e"t before the trial
"ourt and this Court. 2here is nothin$ on re"ord to indi"ate that the e=Passport Pro&e"t has a "ivil
or+s "o#ponent or is ne"essaril! related to an infrastru"ture pro&e"t.
Indeed, the referen"e to Se"tion 6/.-
05
of the IRR of Republi" ("t No. 3,>- )a provision spe"ifi" to
the pro"ure#ent of $oods* in the BSP;s re9uest for interest and to bid "onfir#s that the e=Passport
Pro&e"t is a pro"ure#ent of $oods and not an infrastru"ture pro&e"t. 2hus, ithin the "onteBt of
Republi" ("t No. 3,>- A hi"h is the $overnin$ la for the e=Passport Pro&e"t A the said Pro&e"t is
not an infrastru"ture pro&e"t that is prote"ted fro# loer "ourt issued in&un"tions under Republi" ("t
No. >305, hi"h, to reiterate, has for its purpose the eBpeditious and effi"ient i#ple#entation and
"o#pletion of $overn#ent infrastru"ture pro&e"ts.
5e note that under Se"tion .>, Republi" ("t No. 3.>5 or the (lternative Dispute Resolution ("t of
.//-,
06
the $rant of an interi# #easure of prote"tion b! the proper "ourt before the "onstitution of an
arbitral tribunal is alloed7
Se". .>. "rant of Interim #easure of Protection. A )a* It is not in"o#patible ith an arbitration
a$ree#ent for a part! to re9uest, before "onstitution of the tribunal, fro# a Court an interi# #easure
of prote"tion and for the Court to $rant su"h #easure. (fter "onstitution of the arbitral tribunal and
durin$ arbitral pro"eedin$s, a re9uest for an interi# #easure of prote"tion, or #odifi"ation thereof,
#a! be #ade ith the arbitral tribunal or to the eBtent that the arbitral tribunal has no poer to a"t or
is unable to a"t effe"tivel!, the re9uest #a! be #ade ith the Court. 2he arbitral tribunal is dee#ed
"onstituted hen the sole arbitrator or the third arbitrator, ho has been no#inated, has a""epted
the no#ination and ritten "o##uni"ation of said no#ination and a""eptan"e has been re"eived b!
the part! #a+in$ the re9uest.
)a* 2he folloin$ rules on interi# or provisional relief shall be observed7
),* (n! part! #a! re9uest that provisional relief be $ranted a$ainst the adverse part!.
).* Su"h relief #a! be $ranted7
)i* to prevent irreparable loss or in&ur!?
)ii* to provide se"urit! for the perfor#an"e of an! obli$ation?
)iii* to produ"e or preserve an! eviden"e? or
)iv* to "o#pel an! other appropriate a"t or o#ission.
)6* 2he order $rantin$ provisional relief #a! be "onditioned upon the provision of se"urit! or
an! a"t or o#ission spe"ified in the order.
)-* Interi# or provisional relief is re9uested b! ritten appli"ation trans#itted b! reasonable
#eans to the Court or arbitral tribunal as the "ase #a! be and the part! a$ainst ho# the
relief is sou$ht, des"ribin$ in appropriate detail the pre"ise relief, the part! a$ainst ho# the
relief is re9uested, the $rounds for the relief, and the eviden"e supportin$ the re9uest.
)5* 2he order shall be bindin$ upon the parties.
)6* Either part! #a! appl! ith the Court for assistan"e in i#ple#entin$ or enfor"in$ an
interi# #easure ordered b! an arbitral tribunal.
)0* ( part! ho does not "o#pl! ith the order shall be liable for all da#a$es resultin$ fro#
non"o#plian"e, in"ludin$ all eBpenses and reasonable attorne!;s fees, paid in obtainin$ the
order;s &udi"ial enfor"e#ent.
Se"tion 6)h* of the sa#e statute provides that the GCourtG as referred to in (rti"le 6 of the :odel 4a
shall #ean a Re$ional 2rial Court.
Republi" ("t No. 3.>5 is a $eneral la appli"able to all #atters and "ontroversies to be resolved
throu$h alternative dispute resolution #ethods. 2his la allos a Re$ional 2rial Court to $rant
interi# or provisional relief, in"ludin$ preli#inar! in&un"tion, to parties in an arbitration "ase prior to
the "onstitution of the arbitral tribunal. 2his $eneral statute, hoever, #ust $ive a! to a spe"ial la
$overnin$ national $overn#ent pro&e"ts, Republi" ("t No. >305 hi"h prohibits "ourts, eB"ept the
Supre#e Court, fro# issuin$ 2ROs and rits of preli#inar! in&un"tion in "ases involvin$ national
$overn#ent pro&e"ts.
Foever, as dis"ussed above, the prohibition in Republi" ("t No. >305 is inoperative in this "ase,
sin"e petitioners failed to prove that the e=Passport Pro&e"t is national $overn#ent pro&e"t as defined
therein. 2hus, the trial "ourt had &urisdi"tion to issue a rit of preli#inar! in&un"tion a$ainst the e=
Passport Pro&e"t.
On hether the trial "ourt;s issuan"e of a rit of in&un"tion as proper
Civen the above rulin$ that the trial "ourt had &urisdi"tion to issue a rit of in&un"tion and $oin$ to the
se"ond issue raised b! petitioners, e anser the 9uestion7 5as the trial "ourt;s issuan"e of a rit of
in&un"tion arranted under the "ir"u#stan"es of this "aseK
Petitioners; atta"+ on the propriet! of the trial "ourt;s issuan"e of a rit of in&un"tion is to=pron$ed7
)a* BC( purportedl! has no "lear ri$ht to the in&un"tive relief sou$ht? and )b* BC( ill suffer no $rave
and irreparable in&ur! even if the in&un"tive relief ere not $ranted.
2o support their "lai# that BC( has no "lear ri$ht to in&un"tive relief, petitioners #ainl! alle$e that
the :RP%< Pro&e"t and the e=Passport Pro&e"t are not the sa#e pro&e"t. :oreover, the :RP%<
Pro&e"t purportedl! involves a te"hnolo$! )the .D opti"al bar "ode* that has been rendered obsolete
b! the latest IC(O develop#ents hile the e=Passport Pro&e"t ill "o#pl! ith the latest IC(O
standards )the "onta"tless inte$rated "ir"uit*. Parentheti"all!, and not as a #ain ar$u#ent,
petitioners i#pl! that BC( has no "lear "ontra"tual ri$ht under the (#ended BO2 ($ree#ent sin"e
BC( had previousl! assi$ned all its ri$hts and obli$ations under the said ($ree#ent to PPC.
BC(, on the other hand, "lai#s that the (#ended BO2 ($ree#ent also "onte#plated the suppl!
and%or deliver! of e=Passports ith the inte$rated "ir"uit te"hnolo$! in the future and not onl! the
#a"hine readable passport ith the .D opti"al bar "ode te"hnolo$!. (lso, it is BC(;s assertion that
the inte$rated "ir"uit te"hnolo$! is onl! optional under the IC(O issuan"es. On the #atter of its
assi$n#ent of its ri$hts to PPC, BC( "ounters that it had alread! ter#inated )purportedl! at D'(;s
re9uest* the assi$n#ent a$ree#ent in favor of PPC and that even assu#in$ the ter#ination as not
valid, the (#ended BO2 ($ree#ent eBpressl! stated that BC( shall re#ain solidaril! liable ith its
assi$nee, PPC.
:ost of these fa"tual alle$ations and "ounter=alle$ations alread! tou"h upon the #erits of the #ain
"ontrovers! beteen the D'( and BC(, i.e., the validit! and propriet! of the ter#ination of the
(#ended BO2 ($ree#ent )the :RP%< Pro&e"t* beteen the D'( and BC(. 2he Court dee#s it best
to refrain fro# rulin$ on these #atters sin"e the! should be liti$ated in the appropriate arbitration or
"ourt pro"eedin$s beteen or a#on$ the "on"erned parties.
One preli#inar! point, hoever, that #ust be settled here is hether BC( retains a ri$ht to see+
relief a$ainst the D'( under the (#ended BO2 ($ree#ent in vie of BC(;s previous assi$n#ent of
its ri$hts to PPC. 5ithout pree#ptin$ an! fa"tual findin$ that the appropriate "ourt or arbitral tribunal
on the #atter of the validit! of the assi$n#ent a$ree#ent ith PPC or its ter#ination, e a$ree ith
BC( that it re#ained a part! to the (#ended BO2 ($ree#ent, notithstandin$ the eBe"ution of the
assi$n#ent a$ree#ent in favor of PPC, for it as stipulated in the (#ended BO2 ($ree#ent that
BC( ould be solidaril! liable ith its assi$nee. 'or "onvenient referen"e, e reprodu"e the relevant
provision of the (#ended BO2 ($ree#ent here7
$ection %&'(). It is "learl! and eBpressl! understood that BC( #a! assi$n, "ede and transfer all of
its ri$hts and obli$ations under this (#ended BO2 ($ree#ent to PPC DPhilippine Passport
CorporationE, as full! as if PPC is the ori$inal si$nator! to this (#ended BO2 ($ree#ent, pro8/e
*o9e8er t*at !%A +*a.. nonet*e.e++ be ,o/nt.4 an +e8era..4 ./ab.e 9/t* PP% 1or t*e
per1orman-e o1 a.. t*e ob./0at/on+ an ./ab/./t/e+ 6ner t*/+ Amene !OT
A0reement. )E#phasis supplied.*
'urther#ore, a revie of the re"ords shos that the D'( "ontinued to address its "orresponden"e
re$ardin$ the :RP%< Pro&e"t to both BC( and PPC, even after the eBe"ution of the assi$n#ent
a$ree#ent. Indeed, the D'(;s Noti"e of 2er#ination dated De"e#ber 3, .//5 as addressed to :r.
Bonifa"io Su#billa as President of both BC( and PPC and referred to the (#ended BO2 ($ree#ent
GeBe"uted beteen the Depart#ent of 'orei$n (ffairs )D'(*, on one hand, and the BC( International
Corporation and%or the Philippine Passport Corporation )BC(%PPC*.G (t the ver! least, the D'( is
estopped fro# 9uestionin$ the personalit! of BC( to brin$ suit in relation to the (#ended BO2
($ree#ent sin"e the D'( "ontinued to deal ith both BC( and PPC even after the si$nin$ of the
assi$n#ent a$ree#ent. In an! event, if the D'( trul! believes that PPC is an indispensable part! to
the a"tion, the D'( #a! ta+e ne"essar! steps to i#plead PPC but this should not pre&udi"e the ri$ht
of BC( to file suit or to see+ relief for "auses of a"tion it #a! have a$ainst the D'( or the BSP, for
underta+in$ the e=Passport Pro&e"t on behalf of the D'(.
5ith respe"t to petitioners; "ontention that BC( ill suffer no $rave and irreparable in&ur! so as to
&ustif! the $rant of in&un"tive relief, the Court finds that this parti"ular ar$u#ent #erits "onsideration.
2he BO2 4a as a#ended b! Republi" ("t No. 00,>, provides7
SEC. 0. Contract Termination. = In the event that a pro&e"t is revo+ed, "an"elled or ter#inated b! the
Covern#ent throu$h no fault of the pro&e"t proponent or b! #utual a$ree#ent, the Covern#ent shall
"o#pensate the said pro&e"t proponent for its a"tual eBpenses in"urred in the pro&e"t plus a
reasonable rate of return thereon not eB"eedin$ that stated in the "ontra"t as of the date of su"h
revo"ation, "an"ellation or ter#ination7 Provided, 2hat the interest of the Covern#ent in this
instan"es shall be dul! insured ith the Covern#ent Servi"e Insuran"e S!ste# DCSISE or an! other
insuran"e entit! dul! a""redited b! the Offi"e of the Insuran"e Co##issioner7Provided finall!, 2hat
the "ost of the insuran"e "overa$e shall be in"luded in the ter#s and "onditions of the biddin$
referred to above.
In the event that the $overn#ent defaults on "ertain #a&or obli$ations in the "ontra"t and su"h
failure is not re#ediable or if re#ediable shall re#ain unre#edied for an unreasonable len$th of
ti#e, the pro&e"t proponent%"ontra"tor #a!, b! prior noti"e to the "on"erned national $overn#ent
a$en"! or lo"al $overn#ent unit spe"if!in$ the turn=over date, ter#inate the "ontra"t. 2he pro&e"t
proponent%"ontra"tor shall be reasonabl! "o#pensated b! the Covern#ent for e9uivalent or
proportionate "ontra"t "ost as defined in the "ontra"t. )E#phases supplied.*
In addition, the (#ended BO2 ($ree#ent, hi"h is the la beteen and a#on$ the parties to it,
pertinentl! provides7
$ection (*'&( Default A In -a+e a part4 -omm/t+ an a-t -on+t/t6t/n0 an e8ent o1 e1a6.t, t*e
non)e1a6.t/n0 part4 ma4 term/nate t*/+ Amene !OT A0reement b! servin$ a ritten noti"e to
the defaultin$ part! spe"if!in$ the $rounds for ter#ination and $ivin$ the defaultin$ part! a period of
ninet! )3/* da!s ithin hi"h to re"tif! the default. If the default is not re#edied ithin this period to
the satisfa"tion of the non=defaultin$ part!, then the latter ill serve upon the for#er a ritten noti"e
of ter#ination indi"atin$ the effe"tive date of ter#ination.
$ection (*'&% Proponents Default A If this (#ended BO2 ($ree#ent is term/nate b4 rea+on o1
t*e !%A;+ e1a6.t, t*e DFA +*a.. *a8e t*e 1o..o9/n0 opt/on+<
(. A..o9 t*e !%A;+ 6npa/ -re/tor+ 9*o *o. a ./en on the :RP%< 'a"ilit! to
1ore-.o+e on the :RP%< 'a"ilit!. 2he ri$ht of the BC(;s unpaid "reditors to fore"lose on the
:RP%< 'a"ilit! shall be valid for the duration of the effe"tivit! of this (#ended BO2
($ree#ent? or,
B. A..o9 t*e !%A;+ 6npa/ -re/tor+ 9*o *o. a ./en on t*e MRP23 Fa-/./t4 to e+/0nate
a +6b+t/t6te !%A for the :RP%< Pro&e"t, provided the desi$nated substitute BC( is 9ualified
under eBistin$ las and a""eptable to the D'(. 2his substitute BC( shall hereinafter be
referred to as the GSubstitute BC(.G 2he Substitute BC( shall assu#e all the BC(;s ri$hts
and privile$es, as ell as the obli$ations, duties and responsibilities hereunder? provided,
hoever, that the D'( shall at all ti#es and its sole option, have the ri$ht to invo+e and
eBer"ise an! other re#ed! hi"h #a! be available to the D'( under an! appli"able las,
rules and%or re$ulations hi"h #a! be in effe"t at an! ti#e and fro# ti#e to ti#e. 2he D'(
shall "ooperate ith the "reditors ith a vie to fa"ilitatin$ the "hoi"e of a Substitute BC(,
ho shall ta+e=over the operation, #aintenan"e and #ana$e#ent of the :RP%< Pro&e"t,
ithin three )6* #onths fro# the BC(;s re"eipt of the noti"e of ter#ination fro# the D'(. 2he
Substituted BC( shall have all the ri$hts and obli$ations of the previous BC( as "ontained in
this (#ended BO2 ($ree#ent? or
C. Ta:e)o8er t*e MRP23 Fa-/./t4 an a++6me a.. attenant ./ab/./t/e+ t*ereo1.
D. In a.. -a+e+ o1 term/nat/on 6e to t*e e1a6.t o1 t*e !%A, /t +*a.. pa4 DFA ./=6/ate
ama0e+e9uivalent to the appli"able the )si"* Perfor#an"e Se"urit!.
$ection (*'&+ D,A-s Default A If this (#ended BO2 ($ree#ent is ter#inated b! the BC( b! reason
of the D'(;s Default, t*e DFA +*a..7
(. !e ob./0ate to ta:e o8er t*e MRP23 Fa-/./t4 on an Gas is, here isG basis, and shall
forthith assu#e attendant liabilities thereof? and
B. Pa4 ./=6/ate ama0e+ to the BC( e9uivalent to the folloin$ a#ounts, hi"h #a! be
"har$ed to the insuran"e pro"eeds referred to in (rti"le ,.7
),* In t*e e8ent o1 term/nat/on pr/or to -omp.et/on of the i#ple#entation of the
:RP%< Pro&e"t,ama0e+ +*a.. be pa/ e=6/8a.ent to t*e 8a.6e o1 -omp.ete
/mp.ementat/on, m/n6+ t*e a00re0ate amo6nt o1 t*e attenant ./ab/./t/e+
a++6me b4 t*e DFA, p.6+ ten per-ent >10?@ t*ereo1. 2he a#ount of su"h
"o#pensation shall be deter#ined as of the date of the noti"e of ter#ination and
shall be"o#e due and de#andable ninet! )3/* da!s after the date of this noti"e of
ter#ination. @nder this (#ended BO2 ($ree#ent, the ter# G<alue of the Co#pleted
I#ple#entationG shall #ean the a$$re$ate of all reasonable "osts and eBpenses
in"urred b! the BC( in "onne"tion ith, in relation to and%or b! reason of the :RP%<
Pro&e"t, eB"ludin$ all interest and "apitali8ed interest, as "ertified b! a reputable and
independent a""ountin$ fir# to be appointed b! the BC( and sub&e"t to the approval
b! the D'(, su"h approval shall not be unreasonabl! ithheld.
).* In t*e e8ent o1 term/nat/on a1ter -omp.et/on o1 e+/0n, e8e.opment, an
/n+ta..at/on o1 t*e MRP23 Pro,e-t, ,6+t -ompen+at/on +*a.. be pa/ e=6/8a.ent to
t*e pre+ent 8a.6e o1 t*e net /n-ome 9*/-* t*e !%A eApe-t+ to earn or rea./Be
6r/n0 t*e 6neAp/re or rema/n/n0 term o1 t*/+ Amene !OT A0reement usin$
the internal rate of return on e9uit! )IRRe* defined in the finan"ial pro&e"tions of the
BC( and a$reed upon b! the parties, hi"h is atta"hed hereto and #ade as an
inte$ral part of this (#ended BO2 ($ree#ent as S"hedule G,G. )E#phases
supplied.*
2he validit! of the D'(;s ter#ination of the (#ended BO2 ($ree#ent and the deter#ination of the
part! or parties in default are issues properl! threshed out in arbitration pro"eedin$s as provided for
b! the a$ree#ent itself. Foever, even if e h!potheti"all! a""ept BC(;s "ontention that the D'(
ter#inated the (#ended BO2 ($ree#ent ithout an! default or ron$doin$ on BC(;s part, it is not
indubitable that BC( is entitled to in&un"tive relief.
2he BO2 4a eBpressl! allos the $overn#ent to ter#inate a BO2 a$ree#ent, even ithout fault on
the part of the pro&e"t proponent, sub&e"t to the pa!#ent of the a"tual eBpenses in"urred b! the
proponent plus a reasonable rate of return.
@nder the BO2 4a and the (#ended BO2 ($ree#ent, in the event of default on the part of the
$overn#ent )in this "ase, the D'(* or on the part of the proponent, the non=defaultin$ part! is
alloed to ter#inate the a$ree#ent, a$ain sub&e"t to proper "o#pensation in the #anner set forth in
the a$ree#ent.
2i#e and a$ain, this Court has held that to be entitled to in&un"tive relief the part! see+in$ su"h relief
#ust be able to sho $rave, irreparable in&ur! that is not "apable of "o#pensation.
In 4ope8 v. Court of (ppeals,
00
e held7
Cenerall!, in&un"tion is a preservative re#ed! for the prote"tion of oneOs substantive ri$ht or interest.
It is not a "ause of a"tion in itself but #erel! a provisional re#ed!, an ad&un"t to a #ain suit. It is
resorted to onl! hen there is a pressin$ ne"essit! to avoid in&urious "onse9uen"es hi"h "annot be
re#edied under an! standard "o#pensation. 2he appli"ation of the in&un"tive rit rests upon the
eBisten"e of an e#er$en"! or of a spe"ial reason before the #ain "ase "an be re$ularl! heard. 2he
essential "onditions for $rantin$ su"h te#porar! in&un"tive relief are that the "o#plaint alle$es fa"ts
hi"h appear to be suffi"ient to "onstitute a proper basis for in&un"tion and that on the entire
shoin$ fro# the "ontendin$ parties, the in&un"tion is reasonabl! ne"essar! to prote"t the le$al
ri$hts of the plaintiff pendin$ the liti$ation. 2o re9uisites are ne"essar! if a preli#inar! in&un"tion is
to issue, na#el!, the eBisten"e of a ri$ht to be prote"ted and the fa"ts a$ainst hi"h the in&un"tion is
to be dire"ted are violative of said ri$ht. In parti"ular, for a rit of preli#inar! in&un"tion to issue, the
eBisten"e of the ri$ht and the violation #ust appear in the alle$ation of the "o#plaint and a
preli#inar! in&un"tion is proper onl! hen the plaintiff )private respondent herein* appears to be
entitled to the relief de#anded in his "o#plaint. )E#phases supplied.*
5e reiterated this point in 2ransfield Philippines, In". v. 4u8on F!dro Corporation,
0>
here e
li+eise opined7
Before a rit of preli#inar! in&un"tion #a! be issued, there #ust be a "lear shoin$ b! the
"o#plaint that there eBists a ri$ht to be prote"ted and that the a"ts a$ainst hi"h the rit is to be
dire"ted are violative of the said ri$ht. It #ust be shon that the invasion of the ri$ht sou$ht to be
prote"ted is #aterial and substantial, that the ri$ht of "o#plainant is "lear and un#ista+able and that
there is an ur$ent and para#ount ne"essit! for the rit to prevent serious da#a$e. :oreover, an
in&un"tive re#ed! #a! onl! be resorted to hen there is a pressin$ ne"essit! to avoid in&urious
"onse9uen"es hi"h "annot be re#edied under an! standard "o#pensation. )E#phasis supplied.*
(s the Court eBplained previousl! in Philippine (irlines, In". v. National 4abor Relations
Co##ission
03
7
(n in&ur! is "onsidered irreparable if it is of su"h "onstant and fre9uent re"urren"e that no fair and
reasonable redress "an be had therefor in a "ourt of la, or here there is no standard b! hi"h
their a#ount "an be #easured ith reasonable a""ura"!, that is, it is not sus"eptible of
#athe#ati"al "o#putation. It is "onsidered irreparable in&ur! hen it "annot be ade9uatel!
"o#pensated in da#a$es due to the nature of the in&ur! itself or the nature of the ri$ht or propert!
in&ured or hen there eBists no "ertain pe"uniar! standard for the #easure#ent of da#a$es.
)E#phases supplied.*
It is still "ontentious hether this is a "ase of ter#ination b! the D'( alone or both the D'( and
BC(. 2he D'( "ontends that BC(, b! sendin$ its on Noti"e of Default, li+eise ter#inated or
GabandonedG the (#ended BO2 ($ree#ent. Still, hether this is a ter#ination b! the D'( alone
ithout fault on the part of BC( or a ter#ination due to default on the part of either part!, the BO2
4a and the (#ended BO2 ($ree#ent la! don the #easure of "o#pensation to be paid under the
appropriate "ir"u#stan"es.
Si$nifi"antl!, in BC(;s Re9uest for (rbitration ith the PDRCI, it pra!ed for, a#on$ others, Ga
&ud$#ent orderin$ respondent DD'(E to pa! da#a$es to Clai#ant DBC(E, reasonabl! esti#ated
at P5/,///,///.// as of Dthe date of the Re9uest for (rbitrationE, representin$ lost business
opportunities? finan"in$ fees, "osts and "o##issions? travel eBpenses? le$al fees and eBpenses? and
"osts of arbitration, in"ludin$ the fees of the arbitrator%s.G
>/
(ll the purported da#a$es that BC(
"lai#s to have suffered b! virtue of the D'(;s ter#ination of the (#ended BO2 ($ree#ent are
plainl! deter#inable in pe"uniar! ter#s and "an be Greasonabl! esti#atedG a""ordin$ to BC(;s on
ords.
Indeed, the ri$ht of BC(, a part! hi"h #a! or #a! not have been in default on its BO2 "ontra"t, to
have the ter#ination of its BO2 "ontra"t reversed is not $uaranteed b! the BO2 4a. Even assu#in$
BC(;s inno"en"e of an! brea"h of "ontra"t, all the la provides is that BC( should be ade9uatel!
"o#pensated for its losses in "ase of "ontra"t ter#ination b! the $overn#ent.
2here is one point that none of the parties has hi$hli$hted but is orth! of dis"ussion. In see+in$ to
en&oin the $overn#ent fro# aardin$ or i#ple#entin$ a #a"hine readable passport pro&e"t or an!
si#ilar ele"troni" passport or visa pro&e"t and pra!in$ for the #aintenan"e of the status 9uo ante
pendin$ the resolution on the #erits of BC(;s Re9uest for (rbitration, BC( effe"tivel! see+s to en&oin
the ter#ination of the (#ended BO2 ($ree#ent for the :RP%< Pro&e"t.
2here is no doubt that the :RP%< Pro&e"t is a pro&e"t "overed b! the BO2 4a and, in turn,
"onsidered a Gnational $overn#ent pro&e"tG under Republi" ("t No. >035. @nder Se"tion 6)d* of that
statute, trial "ourts are prohibited fro# issuin$ a 2RO or rit of preli#inar! in&un"tion a$ainst the
$overn#ent to restrain or prohibit the ter#ination or res"ission of an! su"h national $overn#ent
pro&e"t%"ontra"t.
2he rationale for this provision is eas! to understand. 'or if a pro&e"t proponent A that the
$overn#ent believes to be in default A is alloed to en&oin the ter#ination of its "ontra"t on the
$round that it is "ontestin$ the validit! of said ter#ination, then the $overn#ent ill be unable to
enter into a ne "ontra"t ith an! other part! hile the "ontrovers! is pendin$ liti$ation. Obviousl!, a
"ourt;s $rant of in&un"tive relief in su"h an instan"e is pre&udi"ial to publi" interest sin"e $overn#ent
ould be indefinitel! ha#pered in its dut! to provide vital publi" $oods and servi"es in order to
preserve the private proprietar! ri$hts of the pro&e"t proponent. On the other hand, should it turn out
that the pro&e"t proponent as not at fault, the BO2 4a itself presupposes that the pro&e"t
proponent "an be ade9uatel! "o#pensated for the ter#ination of the "ontra"t. (lthou$h BC( did not
spe"ifi"all! pra! for the trial "ourt to en&oin the ter#ination of the (#ended BO2 ($ree#ent and
thus, there is no dire"t violation of Republi" ("t No. >035, a $rant of in&un"tive relief as pra!ed for b!
BC( ill indire"tl! "ontravene the sa#e statute.
<eril!, there is valid reason for the la to den! preli#inar! in&un"tive relief to those ho see+ to
"ontest the $overn#ent;s ter#ination of a national $overn#ent "ontra"t. 2he onl! "ir"u#stan"e
under hi"h a "ourt #a! $rant in&un"tive relief is the eBisten"e of a #atter of eBtre#e ur$en"!
involvin$ a "onstitutional issue, su"h that unless a 2RO or in&un"tive rit is issued, $rave in&usti"e
and irreparable in&ur! ill result.
No, BC( li+eise "lai#s that unless it is $ranted in&un"tive relief, it ould suffer $rave and
irreparable in&ur! sin"e the biddin$ out and aard of the e=Passport Pro&e"t ould be tanta#ount to
a violation of its ri$ht a$ainst deprivation of propert! ithout due pro"ess of la under (rti"le III,
Se"tion , of the Constitution. 5e are un"onvin"ed.(avvphi(
(rti"le III, Se"tion , of the Constitution provides GDnEo person shall be deprived of life, libert!, or
propert! ithout due pro"ess of la, nor shall an! person be denied the e9ual prote"tion of the
las.G Ordinaril!, this "onstitutional provision has been applied to the eBer"ise b! the State of its
soverei$n poers su"h as, its le$islative poer,
>,
poli"e poer,
>.
or its poer of e#inent do#ain.
>6
In the instant "ase, the State a"tion bein$ assailed is the D'(;s ter#ination of the (#ended BO2
($ree#ent ith BC(. (lthou$h the said a$ree#ent involves a publi" servi"e that the D'( is
#andated to provide and, therefore, is i#bued ith publi" interest, the relationship of D'( to BC( is
pri#aril! "ontra"tual and their dispute involves the ad&udi"ation of "ontra"tual ri$hts. 2he propriet! of
the D'(;s a"ts, in relation to the ter#ination of the (#ended BO2 ($ree#ent, should be $au$ed
a$ainst the provisions of the "ontra"t itself and the appli"able statutes to su"h "ontra"t. 2hese
"ontra"tual and statutor! provisions outline hat "onstitutes due pro"ess in the present "ase. In all,
BC( failed to de#onstrate that there is a "onstitutional issue involved in this "ase, #u"h less a
"onstitutional issue of eBtre#e ur$en"!.
(s for the D'(;s purported failure to appropriate suffi"ient a#ounts in its bud$et to pa! for li9uidated
da#a$es to BC(, this ar$u#ent does not support BC(;s position that it ill suffer $rave and
irreparable in&ur! if it is denied in&un"tive relief. 2he D'(;s liabilit! to BC( for da#a$es is "ontin$ent
on BC( provin$ that it is entitled to su"h da#a$es in the proper pro"eedin$s. 2he D'( has no
obli$ation to set aside funds to pa! for li9uidated da#a$es, or an! other +ind of da#a$es, to BC(
until there is a final and eBe"utor! &ud$#ent in favor of BC(. It is illo$i"al and i#pra"ti"al for the D'(
to set aside a si$nifi"ant portion of its bud$et for an event that #a! never happen hen su"h idle
funds should be spent on providin$ ne"essar! servi"es to the popula"e. 'or if it turns out at the end
of the arbitration pro"eedin$s that it is BC( alone that is in default, it ould be the one liable for
li9uidated da#a$es to the D'( under the ter#s of the (#ended BO2 ($ree#ent.
5ith respe"t to BC(;s alle$ation that the e=Passport Pro&e"t is $rossl! disadvanta$eous to the
'ilipino people sin"e it is the $overn#ent that ill be spendin$ for the pro&e"t unli+e the :RP%<
Pro&e"t hi"h ould have been privatel! funded, the sa#e is i##aterial to the issue at hand. If it is
true that the aard of the e=Passport Pro&e"t is ini#i"al to the publi" $ood or tainted ith so#e
ano#al!, it is indeed a "ause for $rave "on"ern but it is a #atter that #ust be investi$ated and
liti$ated in the proper foru#. It has no bearin$ on the issue of hether BC( ould suffer $rave and
irreparable in&ur! su"h that it is entitled to in&un"tive relief fro# the "ourts.
In all, e a$ree ith petitioners D'( and BSP that the trial "ourt;s issuan"e of a rit of preli#inar!
in&un"tion, despite the la"+ of suffi"ient le$al &ustifi"ation for the sa#e, is tanta#ount to $rave abuse
of dis"retion.
2o be ver! "lear, the present de"ision tou"hes onl! on the tin issues of )a* the &urisdi"tion of the
trial "ourt to issue a rit of preli#inar! in&un"tion as an interi# relief under the fa"tual #ilieu of this
"ase? and )b* the entitle#ent of BC( to in&un"tive relief. 2he #erits of the D'( and BC(;s dispute
re$ardin$ the ter#ination of the (#ended BO2 ($ree#ent #ust be threshed out in the proper
arbitration pro"eedin$s. 2he "ivil "ase pendin$ before the trial "ourt is purel! for the $rant of interi#
relief sin"e the #ain "ase is to be the sub&e"t of arbitration pro"eedin$s.
BC(;s petition for interi# relief before the trial "ourt is essentiall! a petition for a provisional re#ed!
)i.e., preli#inar! in&un"tion* an"illar! to its Re9uest for (rbitration in PDRCI Case No. 6/=.//6%BC'.
BC( spe"ifi"all! pra!ed that the trial "ourt $rant it interi# relief pendin$ the "onstitution of the arbitral
tribunal in the said PDRCI "ase. @nfortunatel!, durin$ the penden"! of this "ase, PDRCI Case No.
6/=.//6%BC' as dis#issed b! the PDRCI for la"+ of &urisdi"tion, in vie of the la"+ of a$ree#ent
beteen the parties to arbitrate before the PDRCI.
>-
In Philippine National Ban+ v. Ritratto Croup,
In".,
>5
e held7
( rit of preli#inar! in&un"tion is an an"illar! or preventive re#ed! that #a! onl! be resorted to b! a
liti$ant to prote"t or preserve his ri$hts or interests and for no other purpose durin$ the penden"! of
the prin"ipal a"tion. 2he dis#issal of the prin"ipal a"tion thus results in the denial of the pra!er for
the issuan"e of the rit. B B B. )E#phasis supplied.*
In vie of intervenin$ "ir"u#stan"es, BC( "an no lon$er be $ranted in&un"tive relief and the "ivil
"ase before the trial "ourt should be a""ordin$l! dis#issed. Foever, this is ithout pre&udi"e to the
parties liti$atin$ the #ain "ontrovers! in arbitration pro"eedin$s, in a""ordan"e ith the provisions of
the (#ended BO2 ($ree#ent, hi"h should pro"eed ith dispat"h.
It does not es"ape the attention of the Court that the dela! in the sub#ission of this "ontrovers! to
arbitration as "aused b! the a#bi$uit! in Se"tion ,3./. of the (#ended BO2 ($ree#ent re$ardin$
the proper bod! to hi"h a dispute beteen the parties #a! be sub#itted and the failure of the
parties to a$ree on su"h an arbitral tribunal. Foever, this Court "annot allo this i#passe to
"ontinue indefinitel!. 2he parties involved #ust sit don to$ether in $ood faith and finall! "o#e to an
understandin$ re$ardin$ the "onstitution of an arbitral tribunal #utuall! a""eptable to the#.
5FERE'ORE, the instant petition is hereb! CR(N2ED. 2he assailed Order dated 'ebruar! ,-,
.//0 of the Re$ional 2rial Court of Pasi$ in Civil Case No. 0,/03 and the 5rit of Preli#inar!
In&un"tion dated 'ebruar! .6, .//0 are RE3ERSED and SET ASIDE. 'urther#ore, Civil Case No.
0,/03 is hereb! DISMISSED.
No pronoun"e#ent as to "osts.
SO ORDERED.