G.R. No. 167514 October 25, 2005
Metropolitan Manila Development Authority vs. Trackworks Rail Transit Advertising, Vending and Promotions, Inc.

FACTS

The government, through the DOTC, entered into a Build, Lease and Transfer Agreement with Metro Rail Transit Corporation (MRTC) for the MRT-3 project. The agreement granted MRTC the right to develop commercial premises and obtain advertising income from the MRT-3 structure, including the airspace above its stations. MRTC subsequently contracted with respondent Trackworks, granting it the exclusive right to undertake advertising activities within and along the MRT-3 structure. Trackworks then installed various commercial advertisements.
Petitioner MMDA, invoking its Regulation No. 96-009 which prohibits billboards and similar structures on roads and open spaces, demanded the dismantling of Trackworks’ advertisements. When Trackworks refused, citing its contract with MRTC, MMDA began dismantling them. Trackworks filed a petition for injunction with the Regional Trial Court, which granted a writ of preliminary injunction to restrain MMDA’s actions.

ISSUE

Whether the trial court gravely abused its discretion in issuing the writ of preliminary injunction.

RULING

The Supreme Court ruled that the trial court did not commit grave abuse of discretion. A preliminary injunction is a preservative remedy to protect a party’s rights during litigation. For its issuance, the applicant must show a clear legal right and a violation of that right. The Court found that Trackworks established a prima facie right based on the BLT Agreement, which explicitly authorized MRTC, and by extension its assignee Trackworks, to derive advertising income from the MRT-3 structure. This contractual right appeared to be threatened by MMDA’s dismantling actions.
The Court clarified that the MMDA’s regulatory power is not absolute. Its authority under its charter is limited to setting policies and standards, not to direct regulation and enforcement, which primarily rests with the local government units and the Department of Public Works and Highways under the National Building Code. The MMDA Regulation, being merely an administrative issuance, could not supersede the contractual rights established under the BLT Agreement, which was authorized by a statute (the Build-Operate-Transfer Law). Therefore, Trackworks demonstrated a clear legal right warranting interim protection. The trial court’s assessment of these factual and legal circumstances was not whimsical or capricious, and thus, no grave abuse of discretion attended the issuance of the injunction.