G.R. No. 174136 - Philippine Ports Authority vs. Nasipit Integrated Arrastre and Stevedoring Services, Inc.

Petitioner: Nasipit Integrated Arrastre and Stevedoring Services, Inc. (NIASSI), a domestic corporation with over 15 years’ experience in the stevedoring business.
Respondent: Philippine Ports Authority (PPA), a government agency responsible for the management, planning, development, financing, and operation of all Philippine ports.

In November 2000, under its Pre-Qualification, Bids, and Awards Committee (PBAC), PPA accepted bids for a ten-year cargo handling contract at the Port of Nasipit.

PBAC Resolution No. 005-2000 declared NIASSI as the winning bidder.
A Notice of Award was transmitted to NIASSI, indicating that the ten-year contract would be awarded subject to NIASSI’s compliance with documentary requirements and execution of the formal contract.

Despite the notice, the formal contract was never executed. Instead, PPA issued several hold-over permits authorizing NIASSI to legally operate cargo handling services at the port.

The last hold-over permit was issued on October 13, 2004, with a short validity period concluding on April 13, 2004, after which PPA revoked NIASSI’s authority to operate.
PPA communicated via letter that it would assume the management and operations of the cargo handling services at the Port of Nasipit beginning December 10, 2006.
Although PPA took over operations directly through its Port Services-Special Take-over Unit, it continued to utilize NIASSI’s manpower and equipment during the transition.

At the onset of the PPA takeover, NIASSI filed a petition for a writ of preliminary injunction (later amended to a petition for mandamus with a prayer for a mandatory injunction) to:

Compel PPA to execute or cause the final execution of the cargo handling contract with NIASSI;
Restore the management and operations of the port’s cargo handling services to NIASSI.

The intervention sought to protect NIASSI’s significant investment in equipment, machinery, and manpower, which it had deployed in establishing its port operations.

On March 18, 2005, the RTC issued a resolution granting NIASSI’s prayer for a writ of preliminary mandatory injunction:

The order mandated that the management and operations of the arrastre and stevedoring services at the Port of Nasipit be restored to NIASSI;
It required NIASSI to post a surety bond of One Million Pesos to cover potential damages if the injunction was later found unwarranted.

PPA immediately moved for reconsideration of the RTC resolution, alleging procedural and substantive deficiencies:

PPA contended that the bond was filed improperly (with an individual instead of a surety company as required).
PPA argued that NIASSI was not entitled to injunctive relief as its operating authority was merely a temporary privilege subject to revocation.

On April 11, 2005, the RTC issued a new resolution dissolving the writ of preliminary injunction, ordering NIASSI to surrender control of the port operations to PPA.

NIASSI filed a petition for certiorari with the CA under Rule 65 of the Revised Rules of Court, arguing that:

The RTC gravely abused its discretion by dissolving the preliminary injunction without affording NIASSI a proper hearing;
The issuance of immediate and executory orders caused irreparable injury and violated due process.

The motion for reconsideration filed by PPA was merely a rehashed argument previously advanced and did not warrant dissolution of the injunction;
The RTC’s failure to conduct a proper hearing before dissolving the injunction constituted grave abuse of discretion;
The urgency and self-executory nature of the RTC order justified bypassing the usual requirement of filing a motion for reconsideration.

Consequently, the CA nullified the RTC resolution dissolving the injunction and reinstated the preliminary mandatory injunction in favor of NIASSI.

Whether the RTC committed reversible error by dissolving the writ of preliminary injunction without affording NIASSI due process, specifically a proper hearing and opportunity to oppose the dissolution.
Whether NIASSI was required to exhaust the remedy of filing a motion for reconsideration prior to resorting to a petition for certiorari under Rule 65.
Whether the urgent circumstances, including the immediate executory effect of the RTC’s order and the potential for irreparable harm to NIASSI, justified an exception to the usual requirement for a motion for reconsideration.
Whether the exercise of the state’s police power, as demonstrated by PPA’s ability to revoke temporary permits and take over port operations, can override the contractual rights of a private party when procedural safeguards are lacking.