The Supreme Court upheld the ruling of the Quezon City Regional Trial Court that denied the plea of Korean-Filipino firm Busan Universal Rail Inc. for the issuance of a status quo order enjoining the government from terminating its P3.8 billion three-year maintenance contract for the Metro Rail Transit 3.
In a 14-page decision, the SC’s Second Division, through Associate Justice Henri Jean Paul Inting, ruled that the Quezon City RTC properly dismissed the petition filed by BURI.
The high court agreed that the lower court is barred from issuing a temporary restraining order and preliminary injunctions against national government projects under Republic Act No. 8975, otherwise known as “An Act to Ensure the Expeditious Implementation and Completion of Government Infrastructure Projects by Prohibiting Lower Courts from Issuing Temporary Restraining Orders, Preliminary Injunctions or Preliminary Mandatory Injunctions, Providing Penalties for Violations Thereof, and for Other Purposes.”
The SC rejected the argument of BURI that the RTC has the authority to issue a TRO or other interim measures of protections in cases involving disputes that are proper for arbitration under R.A. No. 9184 or the Government Procurement Reform Act.
BURI insisted that under R.A. No. 9184, its implementing rules and regulations and the MRT-3 contract, all disputes arising from the contract shall be settled through arbitration proceedings governed by R.A. No. 9285 or the Alternative Dispute Resolution Act of 2004.
The firm also argued that under Section 28 of R.A. 9285, the grant of an interim measure of protection by the proper court before the constitution of an arbitral tribunal is allowed.
But in denying BURI’s petition, the SC adopted its previous ruling where it described that R.A. No. 9284 as a general law applicable to all matters and controversies to be resolved through alternative dispute resolution methods.
While R.A. No. 9285 allows trial courts to grant interim or provision relief, including preliminary injunction to parties in arbitration cases prior to the constitution of the arbitral tribunal, the SC said it must give way to a special law governing national government projects, such as R.A. No. 8975.
“With respect to other matters raised. We note that most of the parties’ factual allegations and counter-allegations already touch upon the merits of the main controversy, i.e. the propriety of respondent’s termination of the MRT3 contract, “ the SC said.
“We deem it best to refrain from ruling on this issue and the matters surrounding it since they should be threshed out and litigated in the appropriate arbitration proceedings between parties,” it added.
The Department of Transportation had terminated its contract with BURI in 2017 due to numerous service interruptions which it blamed on the Korean-Filipino maintenance provider.
In 2015, the government put up for bidding the contract for the procurement of goods, infrastructure projects and consulting services of the MRT3 system.
The contract was set to be awarded to a single maintenance service provider that would establish a single point responsibility for the maintenance of the MRT3 system, general overhauling of light rail vehicles, and the total replacement of the signaling system with the approved budget of P4.2 billion.
BURI was eventually declared as the sole entity which passed the eligibility on technical and financial documents evaluation.
After post-qualification, the negotiating team recommended to the MRT3 Bids and Awards Committee (BAC) the award of the MRT3 long-term maintenance contract to BURI in the amount of P3.8 billion as the legally, technically and financially eligible joint venture.