GR 131020; (July, 2000) (Digest)
G.R. No. 131020; July 20, 2000
PHILIPPINE ECONOMIC ZONE AUTHORITY, petitioner, vs. HON. BENJAMIN T. VIANZON, Judge, Regional Trial Court, Balanga, Bataan and SAFFIROU SEACRAFTS, INC., respondents.
FACTS
Petitioner Philippine Economic Zone Authority (PEZA) and private respondent Saffirou Seacrafts, Inc. (SSI) entered into a fifteen-year Registration Agreement on July 21, 1992, leasing land within the Bataan Export Processing Zone. A Supplemental Agreement followed on December 2, 1994. Alleging that SSI failed to comply with the construction and operational schedules stipulated in the agreements, PEZA’s Board of Trustees issued Resolution No. 97-023 on February 6, 1997, canceling the agreements and demanding that SSI vacate the premises within thirty days.
On March 7, 1997, SSI filed a petition for certiorari, prohibition, and mandamus with a prayer for a temporary restraining order and preliminary injunction in the Regional Trial Court (RTC). The RTC granted a writ of preliminary injunction, enjoining PEZA from enforcing the cancellation and demand to vacate pending the case’s resolution. The Court of Appeals affirmed the RTC’s order, prompting PEZA to elevate the matter to the Supreme Court via a petition for review on certiorari.
ISSUE
Whether the trial court committed grave abuse of discretion in issuing the writ of preliminary injunction.
RULING
The Supreme Court ruled that the trial court did not commit grave abuse of discretion and affirmed the Court of Appeals’ decision. The Court held that the requisites for issuing a preliminary injunction were present. PEZA did not contest the initial validity of SSI’s contractual right as a lessee but claimed it was extinguished by the board resolution. The validity of this unilateral cancellation, however, was precisely the main issue pending before the trial court in the principal action. A clear right warranting protection by injunction exists if the applicant’s right is prima facie established; it need not be conclusively proven at the injunctive stage.
The Court emphasized that the purpose of a preliminary injunction is to preserve the status quo ante litem—the situation before the controversy—pending a final adjudication on the merits. Here, the status quo was the continuation of the lease agreement prior to PEZA’s cancellation. The injunction merely prevented PEZA from implementing the cancellation until the trial court could thoroughly determine its validity. The Court also clarified that the petitioner was not guilty of forum shopping, as its appeal to the Supreme Court on questions of law was a legitimate exercise of its right after an adverse decision from the Court of Appeals.