GR 235878; (February, 2020) (Digest)
G.R. No. 235878 , February 26, 2020
BUSAN UNIVERSAL RAIL, INC., PETITIONER, VS. DEPARTMENT OF TRANSPORTATION-METRO RAIL TRANSIT 3, RESPONDENT.
FACTS
Petitioner Busan Universal Rail, Inc. (BURI) entered into a contract (MRT3 Contract) with respondent Department of Transportation-Metro Rail Transit 3 (DOTr-MRT3) for system maintenance, general overhaul of light rail vehicles, and replacement of the signaling system. After BURI commenced performance, respondent paid the initial billings but later withheld payment for Billing No. 9 and subsequent billings. Respondent also directed BURI to explain why the contract should not be terminated due to alleged serious incidents and failure to deliver overhauled rail vehicles. BURI invoked the contract’s dispute resolution clause, requesting mutual consultation and, when unheeded, notified respondent of its intention to commence arbitration. BURI then filed a Petition for the Issuance of Interim Measures of Protection with the Regional Trial Court (RTC), seeking to maintain the status quo and enjoin respondent from terminating the contract. The RTC denied the petition, citing Republic Act No. 8975 , which prohibits lower courts from issuing restraining orders or injunctions against government infrastructure projects. Respondent subsequently issued a Notice to Terminate and a Decision terminating the MRT3 Contract. BURI’s motion for reconsideration was denied by the RTC, prompting this petition.
ISSUE
Whether or not the Regional Trial Court has jurisdiction to issue the interim measures of protection and restraining order sought by petitioner against respondent.
RULING
The Supreme Court DENIED the petition and AFFIRMED the RTC Orders. The RTC correctly held that it had no jurisdiction to issue the interim measures of protection. While Republic Act No. 9285 (the Alternative Dispute Resolution Act) allows a party to request interim measures from a court before the constitution of an arbitral tribunal, this general provision must yield to the specific and express prohibition under Section 3 of Republic Act No. 8975 . RA 8975 explicitly prohibits all lower courts from issuing temporary restraining orders, preliminary injunctions, or preliminary mandatory injunctions against the implementation or termination of government infrastructure projects. The MRT3 Contract, being a government infrastructure project, falls squarely within this prohibition. The Court cited the precedent in Department of Foreign Affairs v. Falcon, which upheld the primacy of RA 8975’s ban over general grants of jurisdiction to issue injunctive relief. The arbitration clause in the contract and the provisions of RA 9184 (the Government Procurement Reform Act) mandating arbitration for disputes do not override the specific statutory prohibition in RA 8975. The issues regarding the propriety of the contract termination are matters that should be threshed out in the arbitration proceedings between the parties.