GV Diversified International v. Court of Appeals
REITERATIONFacts
The Antecedents: On March 18, 1998, the City of Cagayan de Oro entered into a Build and Transfer Contract with GV Diversified International, Inc. (GV Diversified) for the construction of the South Diversion Road and PCDG Cargo Bridge Project for P635,999,929.79, payable in US dollars. An initial payment of P23,000,000 was released to GV Diversified. Following the election of Vicente Y. Emano as Mayor, a committee investigated the contract and found it grossly disadvantageous to the government. In December 2000, an amended contract was forged, making the project cost payable in Philippine pesos. GV Diversified assigned its rights and obligations to White Horse Trading Development and Construction (White Horse) for P25,000,000, an assignment confirmed by the City through an ordinance. White Horse was notified to commence work. However, White Horse failed to comply with the cash consideration for the assignment, leading GV Diversified to rescind the assignment with notice to the City. Mayor Emano refused to recognize the rescission and, in turn, rescinded the amended contract between GV Diversified and the City. The City then published an invitation for bids for the same project. Procedural History: GV Diversified filed a Complaint for specific performance, injunction, and damages against the City, seeking a temporary restraining order (TRO) against the opening of bids. The RTC of Cagayan de Oro City issued a TRO on June 25, 2002. The City filed a Motion to Dismiss the application for TRO and/or preliminary injunction, arguing that the RTC lacked jurisdiction under Presidential Decree (P.D.) No. 1818 and that there was a lack of notice and hearing. The presiding judge inhibited himself, and the case was re-raffled. The RTC, in a Resolution dated July 9, 2002, denied the motion to dismiss. On July 12, 2002, the RTC issued an Order for the issuance of a Writ of Preliminary Injunction, directing the defendants to desist from opening sealed bids for the project. The RTC denied the City's motion for reconsideration. Aggrieved, the City filed a petition for certiorari and prohibition with the Court of Appeals (CA), seeking to set aside the RTC Order. The CA issued a TRO on August 27, 2002, and after hearing, rendered a Decision on January 7, 2003, lifting the writ of preliminary injunction issued by the RTC. The CA denied GV Diversified's motion for reconsideration on May 15, 2003. The Petition: GV Diversified filed the instant special civil action for certiorari, questioning whether the CA committed grave abuse of discretion in lifting the preliminary injunction issued by the RTC.
Issue(s)
Whether the City may be stopped by preliminary prohibitory injunction from awarding through public bidding the completion of the South Diversion Road and PCDG Cargo Bridge Project. Whether the Court of Appeals committed grave abuse of discretion in lifting the preliminary injunction issued by the Regional Trial Court.
Ruling
The petition is dismissed. The Decision of the Court of Appeals, dated January 7, 2003, in CA-G.R. SP No. 72302, is affirmed.
Ratio Decidendi
On the issue of whether the City may be stopped by preliminary prohibitory injunction from awarding through public bidding the completion of the South Diversion Road and PCDG Cargo Bridge Project: The Court held that Presidential Decree (P.D.) No. 1818, which prohibits courts from issuing restraining orders or preliminary injunctions in cases involving infrastructure projects of the government, was superseded by Republic Act (Rep. Act) No. 8975. Rep. Act No. 8975 delineates more clearly the coverage of this prohibition, stating that no court, except the Supreme Court, shall issue any temporary restraining order, preliminary injunction, or preliminary mandatory injunction against the government to restrain, prohibit, or compel acts such as the bidding or awarding of contracts for national government projects. The South Diversion Road and PCDG Cargo Bridge Project, being covered by the Build-Operate-and-Transfer Law, is clearly a national government project within the meaning of Rep. Act No. 8975. Therefore, the preliminary injunction issued by the RTC, which sought to restrain the City from opening the sealed bids, was void and of no force and effect by operation of law. On the issue of whether the Court of Appeals committed grave abuse of discretion in lifting the preliminary injunction issued by the RTC: Consequently, the Court of Appeals, in lifting the preliminary injunction, did not commit grave abuse of discretion; rather, it served the purpose of Rep. Act No. 8975 by allowing the bidding process to continue without undue and costly delay. The Court emphasized that a contrary ruling would only slow down government development efforts to the detriment of the general public and cause unnecessary increased construction costs, which is contrary to the clear mandate of the law. The respondents also argued that the petitioner had lost standing to claim injury due to the assignment of its rights, and that the project had already resumed with the winning bidder, UKC Builders, Inc., rendering the petition moot. However, the primary basis for dismissing the petition was the void nature of the RTC's injunctive writ under Rep. Act No. 8975.
Main Doctrine
A preliminary injunction issued by any court, other than the Supreme Court, for the purpose of restraining the bidding or awarding of a national government project is void and of no force and effect pursuant to Republic Act No. 8975.