G.R. No. 176657 - Department of Foreign Affairs vs. Falcon

As an ICAO member, the Philippines was to issue Machine Readable Travel Documents (MRTDs) by April 2010.
The Department of Foreign Affairs (DFA) and Bangko Sentral ng Pilipinas (BSP) launched the Machine Readable Passport and Visa Project (MRP/V Project) under the Build-Operate-Transfer (BOT) Law (RA 6957, as amended by RA 7718).
The Pre-qualification, Bids and Awards Committee (PBAC) conducted public bidding on January 10, 2000; BCA International Corporation’s (BCA) was the sole compliant bid.

February 8, 2001: BOT Agreement executed by DFA and Philippine Passport Corporation (PPC), BCA’s project company.
April 5, 2002: Amended BOT Agreement signed by DFA and BCA (with PPC’s conformity) to harmonize IRR provisions, add Sections 9.05 (performance and warranty securities) and 20.15 (assignment to PPC with joint liability), and revise project completion dates.
Phases 1–6 defined detailed planning, central implementation, regional rollout, full implementation (including foreign posts), in-service maintenance, and turnover to DFA.

DFA alleged BCA/PPC delays and financial incapacity; in February 2005 DFA demanded proof of capitalization, bank guarantee and audited statements per Section 5.02(A).
BCA submitted partial documents, disputed further requirements, and in August 2005 terminated its assignment agreement with PPC to implement directly.
December 9, 2005: DFA issued Notice of Termination of the Amended BOT Agreement and demanded liquidated damages.
December 22, 2005: BCA sent Notice of Default against DFA, sought mutual discussion (Section 19.01); DFA ignored.

April 7, 2006: BCA filed Request for Arbitration with Philippine Dispute Resolution Center, Inc. (PDRCI) under Section 19.02 (UNCITRAL Rules).
DFA declined PDRCI jurisdiction (May 29, 2006), arguing no institutional agreement and omission of PPC. DOJ Opinion No. 35-2006 (May 31, 2006) upheld DFA termination.
BSP and DFA proceeded to procure an electronic passport (e-Passport) system under RA 9184 (Government Procurement Reform Act).
June 2006: BCA filed petition for interim relief (TRO/preliminary injunction) before RTC Pasig, Branch 71, to enjoin bidding or implementation of the e-Passport Project, arguing irreparable loss to its BOT rights.
January 23, 2007: RTC granted TRO; February 14, 2007: RTC granted preliminary injunction upon P10 million bond.

March 2, 2007: DFA and BSP petitioned SC to annul the RTC’s Order (Feb 14, 2007) and Writ (Feb 23, 2007) for grave abuse of discretion.
They invoked RA 8975, which prohibits lower courts from enjoining national government infrastructure or BOT projects, absent extreme urgency constitutional issue.

March 12, 2007: SC issued TRO enjoining RTC from implementing its orders; BCA’s motion to lift TRO denied (June 4, 2007; Sept 10, 2007).
Parties filed memoranda; case submitted for decision.

Did the RTC gravely abuse its discretion, exceeding jurisdiction, by enjoining the e-Passport Project—a “national government project” under RA 8975?
Did the RTC abuse its discretion in granting BCA’s interim relief, given that BCA lacked (a) a clear right to be protected by injunction and (b) evidence of grave and irreparable injury, while public interest suffered?