GR 145742; (July, 2005) (Digest)
G.R. No. 145742 . July 14, 2005
THE PHILIPPINE PORTS AUTHORITY, represented by its GENERAL MANAGER JUAN O. PENA, Petitioners, vs. CIPRES STEVEDORING & ARRASTRE, INC., Respondents.
FACTS
The Philippine Ports Authority (PPA) awarded Cipres Stevedoring & Arrastre, Inc. (CISAI) an eight-year contract for cargo handling operations at the Port of Dumaguete City, expiring on 31 December 1998. PPA Administrative Order No. 03-90 provided that cargo handling contractors with satisfactory performance were entitled to contract renewal. CISAI received a “very satisfactory” rating. Following the contract’s expiration, CISAI operated under a series of hold-over permits from PPA. During this period, PPA issued a new Administrative Order, No. 03-2000, mandating that all cargo handling contracts exceeding three years must be awarded through public bidding. Pursuant to this new order, PPA scheduled a public bidding for the Dumaguete port operations.
ISSUE
Whether the Court of Appeals correctly upheld the Regional Trial Court’s issuance of a writ of preliminary injunction to stop PPA from conducting the public bidding, based on CISAI’s claim of a vested right to renewal under the old administrative order.
RULING
The Supreme Court ruled that the Court of Appeals erred. CISAI possessed no vested right to a renewal of its contract. A vested right is one that is absolute, complete, and unconditional, to the exercise of which no obstacle exists. The provision in PPA AO No. 03-90 stating that satisfactory contractors “shall be granted renewal” did not create an absolute entitlement. It was a statement of policy subject to the overarching discretion and regulatory power of the PPA. The grant of a new contract remained a prerogative of the state, exercised through the PPA, and was not a ministerial duty owed to CISAI. The issuance of PPA AO No. 03-2000, which changed the policy from renewal to public bidding, was a valid exercise of the PPA’s quasi-legislative power to amend its rules for the public interest. Administrative regulations of this nature can be changed prospectively, and such changes do not impair vested rights because no such rights to a future contract had accrued. The preliminary injunction was improperly issued, as CISAI failed to establish a clear and unmistakable right warranting such extraordinary relief. The possibility of irreparable injury was negated by the availability of bidding participation and potential damages. The Court reversed the Court of Appeals and dissolved the injunction.