Now Telecom Company, Inc. v. National Telecommunications Commission
REITERATIONFacts
The Antecedents: The Department of Information and Communications Technology (DICT) issued Memorandum Order (M.O.) No. 001, series of 2018, to fast-track the entry of a New Major Player (NMP) in the Philippine telecommunications market. This order stipulated requirements for NMP applicants, including possessing a valid congressional telecommunications franchise, not being affiliated with Globe or PLDT, and having a commitment from a foreign joint venture company. The National Telecommunications Commission (NTC) was directed to promulgate a memorandum circular containing the Terms of Reference (TOR) for the selection process. Subsequently, Administrative Order (A.O.) No. 11, series of 2018, created an Oversight Committee to assist the NTC. The NTC then promulgated Memorandum Circular (M.C.) No. 09-09-2018 (subject Circular) on September 20, 2018, outlining the rules for the selection process, including a timeline for bidding and selection. Procedural History: On October 8, 2018, NOW Telecom Company, Inc. (NOW Telecom) filed a Complaint for Injunction with an application for a Temporary Restraining Order (TRO) and/or Writ of Preliminary Injunction (WPI) against the NTC before the Regional Trial Court (RTC). NOW Telecom challenged specific provisions of the subject Circular, including the Participation Security, Performance Security, and Appeal Fee, as excessive, confiscatory, and violative of due process. It also challenged provisions regarding Business and Roll-out plans and the assignment of radio frequencies. The RTC denied NOW Telecom's prayer for a TRO on October 12, 2018, and subsequently denied its prayer for a WPI in an Order dated November 5, 2018. The RTC ruled that NOW Telecom had no clear or vested right over radio frequencies and had not yet met the financial yardstick for participation. NOW Telecom then filed a Petition for Certiorari with the Court of Appeals (CA), which affirmed the RTC's Order in a Decision dated May 24, 2021, holding that NOW Telecom failed to show a clear and unmistakable right or grave and irreparable injury, and that Republic Act No. 8975 prohibited lower courts from issuing such injunctions against government projects. The CA denied NOW Telecom's motion for reconsideration in a Resolution dated April 12, 2022. The Petition: NOW Telecom filed a Petition for Review on Certiorari before the Supreme Court, assailing the CA's Decision and Resolution. The core issue is the propriety of the denial of NOW Telecom's application for injunctive relief.
Issue(s)
Whether the lower courts erred in denying NOW Telecom's application for a writ of preliminary injunction, considering the mootness of the issue. Whether Republic Act No. 8975 prohibits lower courts from issuing injunctive writs against the selection process for a New Major Player in the telecommunications market. Whether NOW Telecom established the requisites for the issuance of a writ of preliminary injunction, namely: (a) a clear and unmistakable right in esse; (b) a material and substantial invasion of such right; (c) an urgent need for the writ to prevent irreparable injury; and (d) the absence of any other adequate remedy.
Ruling
The Supreme Court denied the Petition for Review on Certiorari. The Court affirmed the Decision and Resolution of the Court of Appeals, upholding the denial of NOW Telecom's application for a writ of preliminary injunction.
Ratio Decidendi
On the mootness of the injunctive relief: The Court held that NOW Telecom's application for injunctive relief had been rendered moot and academic. During the pendency of the case, Mindanao Islamic Telephone Company, Inc. (MISLATEL) was selected as the NMP and issued a Certificate of Public Convenience and Necessity (CPCN). The Court reiterated the established rule that injunction will not issue to restrain an act already done or to prevent events that have already happened, as this would render the writ moot and academic and violate the purpose of preserving the status quo. The actual implementation of the selection process and the assignment of radio frequencies to MISLATEL meant that the act sought to be restrained by NOW Telecom had already been performed. On the prohibition under Republic Act No. 8975: The Court affirmed that lower courts cannot issue an injunctive writ against the selection of the NMP. Section 3 of Republic Act No. 8975 expressly prohibits courts, except the Supreme Court, from issuing TROs or WPIs against the government to restrain, prohibit, or compel acts related to national government projects, including bidding, awarding, and implementation. The Court found that the selection process for the NMP, involving the public bidding for radio frequencies, constitutes a "related and necessary activity" for telecommunications, which is a national government infrastructure. Therefore, the entry of the NMP is a national government project under Republic Act No. 8975, and the subject Circular pertaining to its selection process cannot be subject to injunctive relief by lower courts. On the failure to establish requisites for injunctive relief: Even if Republic Act No. 8975 did not apply, the Court found that NOW Telecom failed to establish the requisites for an injunctive writ. Firstly, NOW Telecom did not possess a clear and unmistakable right in esse. The Court clarified that a legislative franchise to operate telecommunications services does not grant a vested right over specific radio frequencies; the use of radio spectrum is a privilege conferred by the State, subject to laws and regulations. NOW Telecom's franchise explicitly states that the use of radio spectrum is a privilege that may be withdrawn. Secondly, there was no material and substantial invasion of a right, as NOW Telecom, being a mere prospective bidder at the time of its application, had not yet met the financial requirements and had not demonstrated its qualification as the best service provider. Thirdly, there was no urgent need to prevent irreparable injury, as NOW Telecom failed to show any actual or existing right that was violated. Finally, the Court noted that the impositions in the subject Circular, such as participation and performance securities, were proper to ensure the qualification of bidders, and NOW Telecom did not demonstrate that these provisions were unlawful or that it had no other adequate remedy.
Main Doctrine
A lower court cannot issue a writ of preliminary injunction to restrain the government's bidding or awarding of contracts for national government projects, including the selection process for a New Major Player in the telecommunications market, as defined under Republic Act No. 8975. Furthermore, an injunctive relief will not be granted if the act sought to be restrained has already been performed, rendering the prayer moot and academic, and if the applicant fails to establish a clear and unmistakable right in esse, a material and substantial invasion of such right, an urgent need to prevent irreparable injury, and the absence of any other adequate remedy.