G.R. No. 155635 - Bayot vs. Court of Appeals

Republic Act No. 8975 expressly prohibits any court, except the Supreme Court, from issuing any temporary restraining order (TRO), preliminary injunction, or preliminary mandatory injunction against the government or any entity acting under its direction in relation to government infrastructure projects.
The prohibition covers actions related to acquiring, clearing, and developing government project sites; bidding or awarding contracts; commencing or prosecuting projects; terminating or rescinding projects; and undertaking any other lawful activity necessary for such contracts or projects.
This legal framework was reinforced by earlier issuances such as PD 1818 and Administrative Circular No. 11-2000, which set strict limitations on lower courts in matters involving government infrastructure projects.

In 1999, the National Electrification Administration (NEA) issued an invitation to pre-qualify and bid (IPB No. 80) for the supply and delivery of approximately 60,000 woodpoles and 20,000 crossarms for a Rural Electrification Project.
The project was divided into four components (PIA, PIB, PIC for woodpoles and P3 for crossarms), each corresponding to different geographical allocations (Luzon, Visayas, and Mindanao).
Bidders were required to submit applications for eligibility along with technical proposals and, upon successful pre-qualification, were invited to submit their financial bids.
Among the four qualified bidders, Nerwin Industries Corporation emerged as the lowest bidder across all schedules, having met the technical and financial requirements.

NEA conducted a pre-award inspection of Nerwin’s manufacturing plants and its identified supplier in Malaysia to assess the capability to supply the required materials.
NEA Administrator Conrado M. Estrella III recommended the award to Nerwin based on criteria that included:

On December 19, 2000, the NEA Board of Directors, through Resolution No. 32, decided to reduce the material requirements for IBP No. 80 by 50% due to time constraints and impending financial deadlines.
Nerwin protested the reduction, alleging it was a ploy to favor a losing bidder, while losing bidders also filed complaints alleging irregularities such as submission of false or falsified pre-qualification documents.
NEA officials sought and received an opinion from the Government Corporate Counsel reiterating that no legal impediment existed to award the contract to Nerwin.

Amid allegations relating to the revised contract and negotiations with other bidders, Nerwin filed a complaint for specific performance seeking a TRO to enjoin PNOC-Energy Development Corporation (PNOC-EDC) and others from pushing forward with a separate bidding process for part of the items covered by IPB No. 80.
The complaint was filed in the Regional Trial Court (RTC) in Manila, docketed as Civil Case No. 03106921.
On June 27, 2003, after the submission of Nerwin’s rejoinder, Branch 36 of the RTC granted a TRO.
On July 30, 2003, the RTC further issued an order granting a writ of preliminary injunction which:

Denied motions to consolidate and reconsider.
Disqualified the defendants’ counsel.
Declared the defendants in default.
Enjoined PNOC-EDC and its chairman from proceeding with the bidding, pending the posting of a bond by Nerwin.

Respondents filed motions for reconsideration, setting aside the default order, and to admit their answers; all were denied by the RTC on January 13, 2004.
The respondents then filed a special civil action for certiorari in the Court of Appeals, alleging grave abuse of discretion and jurisdictional excess by the RTC in issuing the injunctive orders in direct violation of RA 8975.
On October 22, 2004, the CA annulled and set aside the RTC orders and dismissed Civil Case No. 03106921 for lack of merit, basing its decision on the clear statutory prohibition against the issuance of injunctive relief in government infrastructure projects.

Whether the Court of Appeals erred in dismissing Nerwin’s case on the basis that RA 8975 prohibits the issuance of temporary restraining orders and preliminary injunctions (except by the Supreme Court) in matters involving government projects.
Whether the CA was correct in dismissing the entire case on the premise that RA 8975 prohibits only provisional injunctive relief and not final remedies, thereby affecting the character of the relief sought by Nerwin.
Whether the dismissal of the case was proper considering that Nerwin also presented claims for damages in addition to seeking injunctive relief.