Case Digest (G.R. No. 235878)
Facts:
The case involves Busan Universal Rail, Inc. (petitioner) and the Department of Transportation-Metro Rail Transit 3 (respondent). The events leading to the case began with a negotiated procurement under Republic Act No. 9184, which resulted in a contract between the respondent and a Joint Venture that included Busan Transportation Corporation, Edison Development and Construction, Tramat Mercantile, Inc., TMICorp, Inc., and Castan Corporation. This Joint Venture was incorporated as Busan Universal Rail, Inc. (BURI) and was tasked with the maintenance of the MRT3 system, general overhaul of 43 light rail vehicles (LRVs), and total replacement of the signaling system, with a total contract value of approximately P3.8 billion.
After the petitioner commenced its obligations under the contract, it submitted Billing Nos. 1 to 8, which were paid by the respondent. However, Billing No. 9, submitted on October 26, 2016, remained unpaid due to a memorandum from DOTr Undersecretary Ce...
Case Digest (G.R. No. 235878)
Facts:
Background of the Case
- The case involves a Petition for Review on Certiorari under Rule 45 filed by Busan Universal Rail, Inc. (BURI) against the Department of Transportation-Metro Rail Transit 3 (DOTr-MRT3).
- The petition challenges the Orders dated October 13, 2017, and December 11, 2017, issued by the Regional Trial Court (RTC) of Quezon City, which denied BURI's petition for interim measures of protection and a temporary restraining order (TRO).
Contractual Agreement
- The dispute arises from a contract entered into between DOTr-MRT3 and a Joint Venture (later incorporated as BURI) for the maintenance, general overhaul, and replacement of the signaling system of the MRT3.
- The total contract amount was P3,809,128,888.00, divided into four packages:
- Package 1: Maintenance of the MRT3 system (P1,962,000,000.00).
- Package 2: General overhaul of 43 light rail vehicles (LRVs) (P907,369,561.81).
- Package 3: Total replacement of the MRT3 signaling system (P888,000,000.00).
- Package 4: Additional maintenance works (P51,759,326.19).
Dispute Over Payments
- BURI commenced work under Package 1 and submitted Billing Nos. 1 to 8, which were paid by DOTr-MRT3.
- Billing No. 9, submitted on October 26, 2016, was withheld by DOTr-MRT3 pending additional documentation.
- DOTr-MRT3 later issued a Notice to Terminate the contract on October 16, 2017, citing BURI's failure to deliver overhauled LRVs and other performance issues.
Arbitration Proceedings
- BURI invoked the arbitration clause under the contract and filed a Notice of Arbitration.
- BURI also filed a petition before the RTC seeking interim measures of protection to prevent DOTr-MRT3 from terminating the contract.
- The RTC denied the petition, citing Republic Act (RA) 8975, which prohibits lower courts from issuing TROs or injunctions against government infrastructure projects.
Issue:
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Ruling:
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Ratio:
- Jurisdiction of the RTC: The RTC has no jurisdiction to issue interim measures of protection in cases involving government infrastructure projects due to the prohibition under RA 8975. The arbitration clause in the contract does not override this prohibition.
- Arbitration as the Proper Forum: The dispute between BURI and DOTr-MRT3 is arbitrable, and the parties must resolve their issues through arbitration as agreed in the contract.
- No Constitutional Issue: The case does not involve a constitutional issue of extreme urgency, and the prohibition under RA 8975 applies. The dispute is contractual and should be resolved based on the terms of the contract and applicable laws.
- Public Interest: The prohibition under RA 8975 is grounded in public interest, as allowing injunctions against government projects could delay the provision of essential public services.
Conclusion:
- The Supreme Court upheld the RTC's dismissal of BURI's petition, emphasizing that the dispute must be resolved through arbitration and that the RTC lacked jurisdiction to issue the requested interim measures of protection due to the prohibition under RA 8975.