NERWIN INDUSTRIES CORPORATION,

Petitioner,
Vs. In 1999, the National
PNOC-ENERGY DEVELOPMENT Electrification Administration (NEA)
CORPORATION, and published an invitation to pre-
ESTER R. GUERZON, Chairman, Bids and qualify and to bid for a contract,
Awards Committee, otherwise known as IPB No. 80,
for the supply and delivery of about
sixty thousand (60,000) pieces of
woodpoles and twenty thousand
Republic Act No. 8975[1] expressly (20,000) pieces of crossarms
prohibits any court, except the Supreme Court, needed in the countrys Rural
Electrification Project. The said
from issuing any temporary restraining order contract consisted of four (4)
(TRO), preliminary injunction, or components, namely: PIA, PIB and
PIC or woodpoles and P3 or
preliminary mandatory injunction to restrain, crossarms, necessary for NEAs
projected allocation for Luzon,
prohibit or compel the Government, or any of its
Visayas and Mindanao. In
subdivisions or officials, or any person or entity, response to the said invitation,
bidders, such as private
whether public or private, acting under the respondent [Nerwin], were
Governments direction, from: (a) acquiring, required to submit their application
for eligibility together with their
clearing, and developing the right-of-way, site or technical proposals. At the same
time, they were informed that only
location of any National Government project; (b)
those who would pass the
bidding or awarding of a contract or project of the standard pre-qualification would be
invited to submit their financial
National Government; (c) commencing, bids.
prosecuting, executing, implementing, or
Following a thorough review
operating any such contract or project; (d) of the bidders qualifications and
terminating or rescinding any such contract or eligibility, only four (4) bidders,
including private respondent
project; and (e) undertaking or authorizing any [Nerwin], qualified to participate in
the bidding for the IPB-80
other lawful activity necessary for such contract or contract. Thereafter, the qualified
project. bidders submitted their financial
bids where private respondent
[Nerwin] emerged as the lowest
Accordingly, a Regional Trial Court (RTC) bidder for all
schedules/components of the
that ignores the statutory prohibition and issues a contract. NEA then conducted a
pre-award inspection of private
TRO or a writ of preliminary injunction or
respondents [Nerwins]
preliminary mandatory injunction against a manufacturing plants and facilities,
including its identified supplier
government contract or project acts contrary to in Malaysia, to determine its
law. capability to supply and deliver
NEAs requirements.

In the Recommendation of
Antecedents
Award for Schedules PIA, PIB, PIC
and P3 - IBP No. 80 [for
the] Supply and Delivery of
The following antecedents are culled from Woodpoles and Crossarms dated
the assailed decision of the Court of Appeals October 4, 2000, NEA
administrator Conrado M. Estrella
(CA) promulgated on October 22, 2004,[2] viz: III recommended to NEAs Board of
Directors the approval of award to
private respondent [Nerwin] of all private respondent
schedules for IBP No. 80 on [Nerwin]. Private respondent
account of the following: [Nerwin] protested the said 50%
reduction, alleging that the same
a. Nerwin is the lowest was a ploy to accommodate a
complying and losing bidder.
responsive bidder;
On the other hand, the losing
b. The price difference for bidders Tri State and Pacific
the four (4) schedules Synnergy appeared to have filed a
between the bid of complaint, citing alleged false or
Nerwin Industries (lowest falsified documents submitted
responsive and during the pre-qualification stage
complying bidder) and the which led to the award of the IBP-
second lowest bidder in 80 project to private respondent
the amount of $1.47 [Nerwin].
million for the poles and
$0.475 million for the Thus, finding a way to nullify the
crossarms, is deemed result of the previous bidding, NEA
substantial and extremely officials sought the opinion of the
advantageous to the Government Corporate Counsel
government. The price who, among others, upheld the
difference is equivalent to eligibility and qualification of
7,948 pcs. of poles and private respondent
20.967 pcs. of crossarms; [Nerwin]. Dissatisfied, the said
officials attempted to seek a
c. The price difference for revision of the earlier opinion but
the three (3) schedules the Government Corporate
between the bids of Counsel declared anew that there
Nerwin and the Tri-State was no legal impediment to
Pole and Piling, Inc. prevent the award of IPB-80
approximately in the contract to private respondent
amount of $2.36 million [Nerwin]. Notwithstanding, NEA
for the poles and $0.475 allegedly held negotiations with
million for the crossarms other bidders relative to the IPB-80
are equivalent to contract, prompting private
additional 12.872 pcs. of respondent [Nerwin] to file a
poles and 20.967 pcs. of complaint for specific performance
crossarms; and with prayer for the issuance of an
injunction, which injunctive
d. The bidder and application was granted by Branch
manufacturer are capable 36 of RTC-Manila in Civil Case No.
of supplying the 01102000.
woodpoles and specified
in the bid documents and In the interim, PNOC-Energy
as based on the pre- Development Corporation
award inspection purporting to be under the
conducted. Department of Energy, issued
Requisition No. FGJ 30904R1 or
However, on December 19, 2000, an invitation to pre-qualify and to
NEAs Board of Directors bid for wooden poles needed for its
passed Resolution No. 32 reducing Samar Rural Electrification Project
by 50% the material requirements (O-ILAW project).
for IBP No. 80 given the time
limitations for the delivery of the
materials, xxx, and with the loan
closing date of October 2001 fast Upon learning of the issuance of
approaching. In turn, it resolved to Requisition No. FGJ 30904R1 for the O-ILAW
award the four (4) schedules of
IBP No. 80 at a reduced number to Project, Nerwin filed a civil action in the RTC in
Manila, docketed as Civil Case No. 03106921 4. DECLARING
entitled Nerwin Industries Corporation v. PNOC- defendants in default;

Energy Development Corporation and Ester R. 5. GRANTING the motion

Guerzon, as Chairman, Bids and Awards for issuance of writ of
preliminary injunction.
Committee, alleging that Requisition No. FGJ
Accordingly, let a writ of
30904R1 was an attempt to subject a portion of
preliminary injunction issue
the items covered by IPB No. 80 to another enjoining the defendant PNOC-
EDC and its Chairman of Bids and
bidding; and praying that a TRO issue to enjoin Awards Committee Esther R.
respondents proposed bidding for the wooden Guerzon from continuing the
holding of the subject bidding upon
poles. the plaintiffs filing of a bond in the
amount of P200,000.00 to answer
for any damage or damages which
Respondents sought the dismissal of Civil the defendants may suffer should it
be finally adjudged that petitioner
Case No. 03106921, stating that the complaint is not entitled thereto, until final
averred no cause of action, violated the rule that determination of the issue in this
case by this Court.
government infrastructure projects were not to be
subjected to TROs, contravened the mandatory This order shall become
effective only upon the posting of a
prohibition against non-forum shopping, and the bond by the plaintiffs in the amount
of P200,000.00.
corporate president had no authority to sign and
file the complaint.[3] Let a copy of this order be
immediately served on the
defendants and strict compliance
On June 27, 2003, after Nerwin had filed herein is enjoined. Furnish the
Office of the Government
its rejoinder to respondents reply, the RTC Corporate Counsel copy of this
order.
granted a TRO in Civil Case No. 03106921.[4]
SO ORDERED.
On July 30, 2003, the RTC issued an
[5]
order, as follows: Respondents moved for the
reconsideration of the order of July 30, 2003, and
WHEREFORE, for the foregoing
considerations, an order is hereby also to set aside the order of default and to admit
issued by this Court:
their answer to the complaint.
1. DENYING the motion to
consolidate;
On January 13, 2004, the RTC denied
2. DENYING the urgent respondents motions for reconsideration, to set
motion for
reconsideration; aside order of default, and to admit answer.[6]

3. DISQUALIFYING Attys.
Michael A. Medado, Datu Thence, respondents commenced in the
Omar S. Sinsuat and
Mariano H. Paps from Court of Appeals (CA) a special civil action
appearing as counsel for for certiorari (CA-GR SP No. 83144), alleging that
the defendants;
the RTC had thereby committed grave abuse of
 Supreme Court, on
discretion amounting to lack or excess of government projects.
jurisdiction in holding that Nerwin had been
II. Whether or not the CA erred in
entitled to the issuance of the writ of preliminary ordering the dismissal of the
injunction despite the express prohibition from the entire case on the basis of
Rep. Act 8975 which prohibits
law and from the Supreme Court; in issuing the the issuance only of a
preliminary injunction but not
TRO in blatant violation of the Rules of Court and
injunction as a final remedy.
established jurisprudence; in declaring
III. Whether or not the CA erred in
respondents in default; and in disqualifying dismissing the case
respondents counsel from representing them.[7] considering that it is also one
for damages.

On October 22, 2004, the CA promulgated

Ruling
its decision,[8] to wit:

WHEREFORE, the petition is The petition fails.

GRANTED. The assailed Orders
dated July 30 and December 29,
2003 are hereby ANNULED and In its decision of October 22, 2004, the CA
SET ASIDE. Accordingly, Civil
explained why it annulled and set aside the
Case No. 03106921, private
respondents complaint for assailed orders of the RTC issued on July 20,
issuance of temporary restraining
order/writ of preliminary injunction 2003 and December 29, 2003, and why it
before Branch 37 of the Regional altogether dismissed Civil Case No. 03106921, as
Trial Court of Manila, is
DISMISSED for lack of merit. follows:
It is beyond dispute that the crux of
SO ORDERED. the instant case is the propriety of
respondent Judges issuance of a
preliminary injunction, or the earlier
TRO, for that matter.

Respondent Judge gravely abused

Nerwin filed a motion for reconsideration, his discretion in entertaining an
application for TRO/preliminary
but the CA denied the motion on February 9,
injunction, and worse, in issuing a
2005.[9] preliminary injunction through the
assailed order enjoining petitioners
sought bidding for its O-ILAW
Issues Project. The same is a palpable
violation of RA 8975 which was
approved on November 7, 2000,
Hence, Nerwin appeals, raising the thus, already existing at the time
respondent Judge issued the
following issues:
assailed Orders dated July 20
and December 29, 2003.
I. Whether or not the CA erred
in dismissing the case on the Section 3 of RA 8975 states in no
basis of Rep. Act 8975 uncertain terms, thus:
prohibiting the issuance of
temporary restraining orders Prohibition on the
and preliminary injunctions, Issuance of temporary
except if issued by the Restraining Order,
Preliminary Injunctions
 and Preliminary
Mandatory Moreover, to bolster the
Injunctions. No court, significance of the said prohibition,
except the Supreme the Supreme Court had the same
Court, shall issue any embodied in its Administrative
temporary restraining Circular No. 11-2000 which
order, preliminary reiterates the ban on issuance of
injunction or preliminary TRO or writs of Preliminary
mandatory injunction Prohibitory or Mandatory Injunction
against the government, in cases involving Government
or any of its subdivisions, Infrastructure Projects. Pertinent is
officials, or any person or the ruling in National Housing
entity, whether public or Authority vs. Allarde As regards
private, acting under the the definition of infrastructure
governments direction, to projects, the Court stressed
restrain, prohibit or in Republic of the Phil. vs.
compel the following acts: Salvador Silverio and Big Bertha
xxx Construction: The term
(b) Bidding or awarding infrastructure projects means
of contract/project of construction, improvement and
the national rehabilitation of roads, and
government as defined bridges, railways, airports,
under Section 2 hereof; seaports, communication facilities,
xxx irrigation, flood control and
This prohibition shall drainage, water supply and
apply in all cases, sewerage systems, shore
disputes or controversies protection, power facilities,
instituted by a private national buildings, school
party, including but not buildings, hospital buildings and
limited to cases filed by other related construction projects
bidders or those claiming that form part of the government
to have rights through capital investment.
such bidders involving
such Thus, there is nothing from the law
contract/project. This or jurisprudence, or even from the
prohibition shall not apply facts of the case, that would justify
when the matter is of respondent Judges blatant
extreme urgency disregard of a simple,
involving a constitutional comprehensible and unequivocal
issue, such that unless a mandate (of PD 1818) prohibiting
temporary restraining the issuance of injunctive writs
order is issued, grave relative to government
injustice and irreparable infrastructure projects. Respondent
injury will arise. xxx Judge did not even endeavor,
although expectedly, to show that
The said proscription is not entirely the instant case falls under the
new. RA 8975 merely single exception where the said
supersedes PD 1818 which earlier proscription may not apply,
underscored the prohibition to i.e., when the matter is of extreme
courts from issuing restraining urgency involving a constitutional
orders or preliminary injunctions in issue, such that unless a
cases involving infrastructure or temporary restraining order is
National Resources Development issued, grave injustice and
projects of, and public utilities irreparable injury will arise.
operated by, the government. This
law was, in fact, earlier upheld to Respondent Judge could not have
have such a mandatory nature by legally declared petitioner in
the Supreme Court in an default because, in the first place,
administrative case against a he should not have given due
Judge. course to private respondents
 complaint for injunction.Indubitably, (c) Commencement,
the assailed orders were issued prosecution, execution,
with grave abuse of discretion implementation, operation of any
amounting to lack or excess of such contract or project;
jurisdiction.
(d) Termination or rescission
Perforce, this Court no longer sees of any such contract/project; and
the need to resolve the other
grounds proffered by petitioners.[10] (e) The undertaking or
authorization of any other lawful
activity necessary for such
The CAs decision was absolutely correct. contract/project.

The RTC gravely abused its discretion, firstly, This prohibition shall apply in
when it entertained the complaint of Nerwin all cases, disputes or controversies
instituted by a private party,
against respondents notwithstanding that Nerwin including but not limited to cases
filed by bidders or those claiming
was thereby contravening the express provisions
to have rights through such
of Section 3 and Section 4 of Republic Act No. bidders involving such
contract/project. This prohibition
8975 for its seeking to enjoin the bidding out by shall not apply when the matter is
respondents of the O-ILAW Project; and, of extreme urgency involving a
constitutional issue, such that
secondly, when it issued the TRO and the writ of unless a temporary restraining
order is issued, grave injustice and
preliminary prohibitory injunction.
irreparable injury will arise. The
applicant shall file a bond, in an
amount to be fixed by the court,
Section 3 and Section 4 of Republic Act which bond shall accrue in favor of
No. 8975 provide: the government if the court should
finally decide that the applicant
Section 3. Prohibition on the was not entitled to the relief
Issuance of Temporary Restraining sought.
Orders, Preliminary Injunctions
and Preliminary Mandatory If after due hearing the court
Injunctions. No court, except the finds that the award of the contract
Supreme Court, shall issue any is null and void, the court may, if
temporary restraining order, appropriate under the
preliminary injunction or circumstances, award the contract
preliminary mandatory injunction to the qualified and winning bidder
against the government, or any of or order a rebidding of the same,
its subdivisions, officials or any without prejudice to any liability
person or entity, whether public or that the guilty party may incur
private, acting under the under existing laws.
governments direction, to restrain,
prohibit or compel the following Section 4. Nullity of Writs
acts: and Orders. - Any temporary
restraining order, preliminary
(a) Acquisition, clearance and injunction or preliminary
development of the right-of-way mandatory injunction issued in
and/or site or location of any violation of Section 3 hereof is
national government project; void and of no force and effect.

(b) Bidding or awarding of

contract/project of the national The text and tenor of the provisions being clear
government as defined under
and unambiguous, nothing was left for the RTC to
Section 2 hereof;
do except to enforce them and to exact upon
 Authority v. Hon. Allarde wherein
Nerwin obedience to them. The RTC could not this Court stressed that P.D. No.
have been unaware of the prohibition under 1818 expressly deprives courts of
jurisdiction to issue injunctive writs
Republic Act No. 8975 considering that the Court against the implementation or
had itself instructed all judges and justices of the execution of a government
infrastructure project.
lower courts, through Administrative Circular No.
Reiterating the prohibitory
11-2000, to comply with and respect the
mandate of P.D. No. 1818, the
prohibition against the issuance of TROs or writs Court in Atty. Caguioa v. Judge
Lavia faulted a judge for grave
of preliminary prohibitory or mandatory injunction misconduct for issuing a TRO
involving contracts and projects of the against a government
infrastructure project thus:
Government.
xxx It appears that
respondent is either
It is of great relevance to mention at this juncture feigning a
misunderstanding of the
that Judge Vicente A. Hidalgo, the Presiding law or openly manifesting
Judge of Branch 37 of the RTC, the branch to a contumacious
indifference thereto. In
which Civil Case No. 03106921 had been raffled, any case, his disregard of
was in fact already found administratively liable the clear mandate of PD
1818, as well as of the
for gross misconduct and gross ignorance of the Supreme Court Circulars
enjoining strict
law as the result of his issuance of the assailed compliance therewith,
TRO and writ of preliminary prohibitory injunction. constitutes grave
misconduct and conduct
The Court could only fine him in the amount prejudicial to the proper
of P40,000.00 last August 6, 2008 in view of his administration of justice.
His claim that the said
intervening retirement from the service. That statute is inapplicable to
his January 21, 1997
sanction was meted on him in A.M. No. RTJ-08-
Order extending the
2133 entitled Sinsuat v. Hidalgo,[11] where this dubious TRO is but a
contrived subterfuge to
Court stated: evade administrative
liability.
The Court finds that, indeed,
respondent is liable for gross In resolving matters
misconduct. As the CA explained in litigation, judges
in its above-stated Decision in the should endeavor
petition for certiorari, respondent assiduously to
failed to heed the mandatory ban ascertain the facts and
imposed by P.D. No. 1818 and the applicable laws.
R.A. No. 8975 against a Moreover, they should
government infrastructure project, exhibit more than just a
which the rural electrification cursory acquaintance
project certainly was. He thereby with statutes and
likewise obstinately disregarded procedural rules. Also,
this Courts various circulars they are expected to
enjoining courts from issuing TROs keep abreast of and be
and injunctions against conversant with the
government infrastructure projects rules and the circulars
in line with the proscription under which the Supreme
R.A. No. 8975. Apropos are Gov. Court has adopted and
Garcia v. Hon. which affect the
Burgos and National Housing
 disposition of cases
before them. jurisprudence has set to control the issuance of
TROs and writs of injunction, and to now insist on
Although judges have
in their favor the conformity to them by all litigants and lower
presumption of regularity courts. Only thereby may the grave misconduct
and good faith in the
performance of their committed in Civil Case No. 03106921 be
judicial functions, a
avoided.
blatant disregard of the
clear and unmistakable
terms of the law A preliminary injunction is an order
obviates this granted at any stage of an action or proceeding
presumption and prior to the judgment or final order, requiring a
renders them party or a court, agency or person, to refrain from
susceptible to a particular act or acts.[13] It is an ancillary or
administrative preventive remedy resorted to by a litigant to
sanctions. (Emphasis protect or preserve his rights or interests during
and underscoring
the pendency of the case. As such, it is issued
supplied)
only when it is established that:
The pronouncements
in Caguioa apply as well (a) The applicant is entitled to the
to respondent. relief demanded, and the whole
or part of such relief consists in
The questioned acts of restraining the commission or
respondent also constitute gross continuance of the act or acts
ignorance of the law for being complained of, or in requiring the
patently in disregard of simple, performance of an act or acts,
elementary and well-known rules either for a limited period or
which judges are expected to know perpetually; or
and apply properly.
(b) The commission, continuance or
IN FINE, respondent is guilty non-performance of the act or
of gross misconduct and gross acts complained of during the
ignorance of the law, which are litigation would probably work
serious charges under Section 8 of injustice to the applicant; or
Rule 140 of the Rules of Court. He
having retired from the service, a (c) A party, court, agency or a
fine in the amount of P40,000 is person is doing, threatening, or
imposed upon him, the maximum is attempting to do, or is
amount fixed under Section 11 of procuring or suffering to be
Rule 140 as an alternative done, some act or acts probably
sanction to dismissal or in violation of the rights of the
suspension.[12] applicant respecting the subject
of the action or proceeding, and
tending to render the judgment
Even as the foregoing outcome has ineffectual.[14]

rendered any further treatment and discussion of

Nerwins other submissions superfluous and
unnecessary, the Court notes that the RTC did The existence of a right to be protected by the

not properly appreciate the real nature and true injunctive relief is indispensable. In City

purpose of the injunctive remedy. This failing of Government of Butuan v. Consolidated

the RTC presses the Court to use this decision to Broadcasting System (CBS), Inc.,[15] the Court

reiterate the norms and parameters long standing elaborated on this requirement, viz:
 As with all equitable injunction pending the decision of
remedies, injunction must be the case on the merits. This should
issued only at the instance of a really be so since our concern
party who possesses sufficient here involves only the propriety of
interest in or title to the right or the the preliminary injunction and not
property sought to be protected. It the merits of the case still
is proper only when the applicant pending with the trial court.
appears to be entitled to the relief
demanded in the complaint, which Thus, to be entitled to the writ
must aver the existence of the right of preliminary injunction, the private
and the violation of the right, or respondent needs only to show that
whose averments must in the it has the ostensible right to the
minimum constitute final relief prayed for in its
a prima facie showing of a right to complaint xxx.[18]
the final relief sought. Accordingly,
the conditions for the issuance of
the injunctive writ are: (a) that the In this regard, the Rules of Court grants a broad
right to be protected exists prima latitude to the trial courts considering that
facie; (b) that the act sought to be conflicting claims in an application for a
enjoined is violative of that right; provisional writ more often than not involve and
and (c) that there is an urgent and require a factual determination that is not the
paramount necessity for the writ to function of the appellate courts.[19] Nonetheless,
prevent serious damage. An the exercise of such discretion must be
injunction will not issue to sound, that is, the issuance of the writ, though
protect a right not in esse, or a
discretionary, should be upon the grounds and in
right which is merely contingent
the manner provided by law.[20] When that is done,
and may never arise; or to
restrain an act which does not the exercise of sound discretion by the issuing
give rise to a cause of action; or court in injunctive matters must not be interfered
to prevent the perpetration of an with except when there is manifest abuse.[21]
act prohibited by statute.
Indeed, a right, to be protected Moreover, judges dealing with applications for the
by injunction, means a right
clearly founded on or granted by injunctive relief ought to be wary of improvidently
law or is enforceable as a matter
or unwarrantedly issuing TROs or writs of
of law.[16]
injunction that tend to disposeof the merits
Conclusive proof of the existence of the right to without or before trial. Granting an application for
be protected is not demanded, however, for, as the relief in disregard of that tendency is judicially
the Court has held in Saulog v. Court of Appeals, impermissible,[22] for it is never the function of a
[17]
it is enough that: TRO or preliminary injunction to determine the

xxx for the court to act, there merits of a case,[23] or to decide controverted
must be an existing basis of facts facts.[24] It is but a preventive remedy whose only
affording a present right which is
directly threatened by an act mission is to prevent threatened wrong,[25] further
sought to be enjoined. And while injury,[26] and irreparable harm[27] or
a clear showing of the right
claimed is necessary, its injustice[28] until the rights of the parties can be
existence need not be
conclusively established. In fact, settled. Judges should thus look at such relief
the evidence to be submitted to only as a means to protect the ability of their
justify preliminary injunction at the
hearing thereon need not be courts to render a meaningful decision.
conclusive or complete but need [29]
Foremost in their minds should be to guard
only be a sampling intended merely
to give the court an idea of the against a change of circumstances that will
justification for the preliminary
hamper or prevent the granting of proper reliefs
after a trial on the merits.[30] It is well worth
remembering that the writ of preliminary injunction
should issue only to prevent the threatened
continuous and irremediable injury to the
applicant before the claim can be justly and
thoroughly studied and adjudicated.[31]

WHEREFORE, the Court AFFIRMS the

decision of the Court of Appeals;
and ORDERS petitioner to pay the costs of suit.

The Court Administrator shall disseminate

this decision to the lower courts for their
guidance.

SO ORDERED.
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