G.R. No. 235878 - Busan Universal Rail, Inc. vs. Department of Transportation-Metro Rail Transit 3

The Department of Transportation (DOTr)-Metro Rail Transit 3 (MRT3) entered into a contract with a Joint Venture composed of Busan Transportation Corporation, Edison Development and Construction, Tramat Mercantile, Inc., TMICorp, Inc., and Castan Corporation for the MRT3 System Maintenance Provider, the general overhaul of 43 Light Rail Vehicles (LRVs), and total replacement of the signaling system.
The Joint Venture was incorporated as Busan Universal Rail, Inc. (BURI or petitioner). The total contract amount was ₱3,809,128,888.00, divided into four packages:

Package 1: Maintenance of MRT3 system for ₱1,962,000,000.00, paid monthly.
Package 2: General overhaul of 43 LRVs for ₱907,369,561.81, with completion within 36 months from Notice to Proceed.
Package 3: Total replacement of MRT3 signaling system for ₱888,000,000.00.
Package 4: Additional maintenance works for ₱51,759,326.19.

Petitioner performed Package 1 and sent Billing Nos. 1 to 8, which the respondent paid correspondingly. However, after sending Billing No. 9 on October 26, 2016, payment was withheld by DOTr Undersecretary for Railways Cesar B. Chavez, who requested additional supporting documents and withheld certain amounts.
Despite petitioner’s explanations, Billing Nos. 9 to 18 remained unpaid. Usec. Chavez asked petitioner to explain why the contract should not be terminated, citing serious incidents and non-delivery of 17 overhauled LRVs.
Petitioner invoked the arbitration clause under Section III, General Conditions of the Contract (GCC), requesting mutual consultation meetings, which were not acceded to by respondent. Petitioner then notified respondent of its intention to commence arbitration and formally filed a Notice of Arbitration.

On October 6, 2017, petitioner filed a Petition for Interim Measures of Protection and a prayer for a Temporary Order of Protection before the Regional Trial Court (RTC), seeking to enjoin the DOTr-MRT3 from terminating the contract and to maintain the status quo.
The RTC issued an order on October 13, 2017 denying the petition, noting that the case had been referred for arbitration.
Respondent issued a Notice to Terminate the contract on October 16, 2017, and on November 3, 2017, formally decided to terminate the contract.
Petitioner moved for partial reconsideration, which the RTC denied on December 11, 2017 for lack of jurisdiction citing RA 8975, which prohibits courts (except the Supreme Court) from issuing temporary restraining orders or injunctions against government infrastructure projects.
Petitioner filed the present petition for review on certiorari assailing the RTC’s orders denying interim relief.

Whether the Regional Trial Court had jurisdiction to issue the interim measures of protection and temporary restraining order sought by the petitioner against the respondent, despite the arbitration clause in the MRT3 Contract.
Whether the prohibition under Republic Act No. 8975 on the issuance of temporary restraining orders and preliminary injunctions in cases involving national government infrastructure projects applies to the present case.
Whether the petitioner’s invocation of the arbitration clause under RA 9184 and the Alternative Dispute Resolution Act (RA 9285) permits the RTC to grant interim relief.
Whether there exists an extreme urgency involving constitutional issues that would justify the issuance of injunctive relief under the exception provided in RA 8975.