Facts:

• The case involves the Land Transportation Franchising and Regulatory Board (LTFRB) and Stronghold Insurance Company, Inc. (Stronghold).
• LTFRB regulates franchises of land-based public utility vehicles and implemented the Passenger Personal Accident Insurance Program (Program).
• The Program ensures operators of passenger public utility vehicles have accident insurance policies.
• LTFRB accredited two groups of insurance providers through open bidding.
• In 2005, LTFRB accredited Universal Transport Solutions, Inc. (UNITRANS), with Stronghold as the lead insurer.
• The five-year contract, extended until November 2011, included a Matching Clause allowing accredited groups to match the best bid in future biddings.
• Before the contract expired, LTFRB conducted three rounds of bidding for new insurance providers.
• Stronghold participated but failed to qualify in the third round due to insufficient capitalization and fewer group members.
• Stronghold sought a writ of prohibition from the Court of Appeals, arguing that the Third Reference's "per insurer" capitalization requirement violated its rights.
• The Court of Appeals nullified the third round of bidding and enjoined LTFRB from enforcing the new contract until Stronghold could exercise its matching right.
• LTFRB contested this decision, arguing that Stronghold's exclusion was due to non-compliance with the Third Reference and that the Matching Clause did not grant Stronghold the right to bypass new bidding terms.
• The Supreme Court issued a temporary restraining order on the Court of Appeals' ruling.

Issue:

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Ruling:

• The Supreme Court set aside the Court of Appeals' decision and made the temporary restraining order permanent.
• The Supreme Court ruled that LTFRB did not commit grave abuse of discretion in disqualifying Str...(Unlock)

Ratio:

• The Supreme Court held that the Court of Appeals erred in issuing the writ of prohibition.
• The writ is applicable only when proceedings are conducted without or in excess of jurisdiction or with grave abuse of discretion.
• The Court of Appeals failed to apply the rigorous standard of Rule 65, which corrects jurisdictional errors, not mere errors of judgment.
• LTFRB's decision to adopt a "per insurer" capitalization requirement in the Third Reference was a proper exercise of its regulatory powers to ensure financially sound insurance pr...continue reading