G.R. No. 194226 - Power Sector Assets and Liabilities Management Corporation vs. Court of Appeals

PSALM (Power Sector Assets and Liabilities Management Corporation) filed a petition for certiorari seeking relief including:

The issuance of a writ of preliminary mandatory injunction authorizing it to post security guards at the NPC MinGen premises;
The annulment of the Court of Appeals’ resolutions issued on June 9, 2010, and August 18, 2010, in CA-G.R. SP No. 03219-MIN;
The dissolution of the writ of preliminary injunction affecting its rights; and
A permanent injunction to prevent respondent Francisco Labao from proceeding against it.

The controversy arose over whether a non-party could be bound by an injunctive writ directed primarily at one of the parties.

Prior to the intervention of PSALM, National Power Corporation (NPC) had conducted a public bid for a security package at its Mindanao–Generation Headquarters (MinGen).
San Miguel Protective Security Agency (SMPSA), managed by Labao, submitted a bid but was disqualified by NPC’s Bids and Awards Committee (BAC) for failure to meet equipage requirements.
Labao, acting in his capacity as general manager of SMPSA, initiated a petition for certiorari in the Regional Trial Court (RTC) seeking to set aside NPC’s disqualification decision.
The RTC issued a temporary restraining order (TRO) on January 30, 2009, and later a writ of preliminary injunction on February 17, 2009, which was made permanent on August 17, 2009, thereby granting SMPSA several reliefs including monetary awards.

On March 9, 2009, NPC entered into an operation and maintenance agreement (OMA) with PSALM pursuant to Republic Act No. 9136 (EPIRA), whereby PSALM assumed responsibility for the security and maintenance of NPC’s assets, including those at the MinGen facility.
On March 29, 2009, PSALM conducted its own public bidding for the security package covering a range of power plants and facilities, including NPC MinGen, and eventually awarded the contract for the facility to Tiger Investigation, Detective & Security Agency (TISDA).
Despite not being a formal party in the RTC proceedings, PSALM was inadvertently included in the CA-issued TRO and subsequent injunctive relief affecting NPC because Labao’s pleadings sought to enjoin “NPC, its agents, successors or assigns such as PSALM.”

The Court of Appeals (CA), in its resolutions—first on June 9, 2010, and later on August 18, 2010—decided to include PSALM within the scope of the injunction despite PSALM not being a formal party or having been properly impleaded in the RTC proceedings.
PSALM contended that it was a separate and distinct corporate entity from NPC under EPIRA, arguing that due process was violated by binding it to an injunction in a case where it was not a party.
The CA defended its ruling by stating that PSALM was a real party in interest, having acted on behalf of NPC and having been designated as an indispensible party with a direct stake in the subject matter concerning the security arrangements at NPC MinGen.

Whether the CA acted without or in excess of jurisdiction—or with grave abuse of discretion—by issuing a writ of preliminary injunction that enjoined PSALM, a non-party, from participating in the bidding process for the security services for NPC MinGen.

Whether PSALM, as the owner of certain assets under EPIRA and as an entity distinct from NPC, should have been considered a real party in interest in the RTC proceedings.
Whether PSALM’s inclusion in the injunction was justified, given that it was not properly impleaded in the proceedings and did not have privity with SMPSA.