CA backs lower court's refusal to stop MRT purchase

Ina Reformina, ABS-CBN News

Posted at Jul 28 2016 04:20 PM

MANILA - Government's move to procure 48 new coaches from a China-based firm as part of its Metro Rail Transit-3 (MRT-3) capacity expansion project will proceed.

The Court of Appeals (CA) affirmed a lower court's ruling denying a plea for the issuance of a preliminary injunction to halt the project. 

In a 16-page decision by its 12th Division penned by Associate Justice Maria Elisa Sempio Diy, the appellate court affirmed the February 20, 2014 order of the Makati City Regional Trial Court Branch 66 which denied Metro Rail Transit Corporation (MRTC) and Metro Rail Transit Holdings II Inc.'s (MRTH II) plea for an injunctive writ against the P3.76-billion award of the contract to Dalian Locomotive and Rolling Stock. The Notice of Award was issued on January 16, 2014.

The appellate court said petitioners' evidence "are insufficient to prove grave injustice and irreparable injury to MRTC since their statements are merely self-serving and uncorroborated by independent and disinterested witnesses." 

MRTC and MRTH II alleged before the trial court that their right to first refusal was violated by the Department of Transportation when it bidded out the MRT-3 expansion project and subsequently awarded the contract to Dalian Locomotive. 

Petitioners claimed that they would suffer irreparable injury if the procurement was not halted, stressing that MRTC owns MRT-3 and government is its mere lessee. 

The appellate court pointed out that the burden of proof rests with petitioners. 

"Bare allegation or invocation that MRTC suffered grave injustice and irreparable injury considering that its constitutionally protected rights were violated will not automatically result in the issuance of injunctive relief.

"Petitioners should discharge the burden to show a clear and compelling breach of a constitutional provision," the decision read.

MRTC's predecessor, Metro Rail Transit Corporation Limited (MRTCL), and the transportation department entered into a build-lease-transfer agreement on August 8, 1997 for the construction and maintenance of the MRT-3. 

MRTCL assigned its preferential right to equip and maintain the railway system to MRTC, including the procurement of additional light rail vehicles (LRV). 

MRTC proposed the procurement of additional LRVs in 2004 and 2005.

On December 19, 2007, the Department of Transportation informed MRTC of the possible procurement of LRVs to address the growing number of MRT-3 passengers. The Department of Transportation said there was no guarantee that the project would be automatically bagged by MRTC. 

Succeeding communications were sent by the Department of Transportation to MRTC between March and April 2008, and, claiming that since these were left unanswered, MRTC already waived its right to first refusal over the project. 

Also in 2008, and in 2009, an arbitration case was initiated by MRTC against the DOTC following government's failure to pay its rentals. 

The CA pointed out that because the arbitration proceedings are ongoing, "there is yet to be a definitive determination on whether MRTC still has the right of first refusal to supply additional LRVs for MRT-3."

"[P]etitioners' right is doubtful, and moreso, their allegations are still being disputed. Indeed, an injunction is not proper," the decision read. 

The appellate court stressed that the decision is limited to the issue of the injunctive writ "considering that the substantive issues presented and disputed by the parties are still not yet finally resolved."

The decision was concurred by Associate Justices Ramon Bato, Jr. and Manuel Barrios.