PHILIPPINE PORTS AUTHORITY vs. CIPRES STEVEDORING & ARRASTRE, INC.

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G.R. No 145742 July 14, 2005
Facts:
Petitioner Philippine Ports Authority (PPA) awarded respondent Cipres Stevedoring and
Arrastre, Inc. (CISAI) permits of varied durations to operate the cargo handling operations in
Dumaguete City. In 1991, petitioner awarded an eight-year contract to respondent expiring on 31
December 1998.

In 1990, PPA issued an administrative order which requires public bidding in the award of
contracts for cargo handling services. Upon expiration of its contract, respondent were given hold-
over permits by petitioner. While respondents second hold-over permit was still in effect, petitioner
issued another administrative order which amended by substitution the administrative order issued
in 1990. It expressly provides that all contract for cargo handling services of more than three (3)
years shall be awarded through public bidding.

Pursuant to the new administrative order, petitioner set the deadline for the submission of the
technical and financial bids. Contending that this action on the part of petitioner was in derogation
of its vested right over the operation of cargo handling enterprise, respondent initiated an action
for specific performance, injunction with application for preliminary mandatory injunction and
temporary restraining order before the RTC.
Respondent alleged in its complaint that the administrative order issued in 1990 explicitly
provides that cargo handling contractors with existing or expired contracts but were able to obtain
a satisfactory performance rating were entitled to a renewal of their respective cargo handling
contracts with petitioner; thus, as respondent was given a rating of very satisfactory in 1998, it
follows that its cargo handling agreement should have been renewed after its expiration.
Respondent likewise claimed that the approval and implementation of the new administrative order
was plainly arbitrary.
The RTC granted respondents prayer for a temporary restraining order.
Petitioner filed a manifestation with urgent motion for reconsideration to the aforesaid order
of the trial court. Petitioner argued that the court a quo did not have the requisite jurisdiction to
issue the assailed temporary restraining order. This motion was denied.
Petitioner seasonably sought reconsideration. The trial court set aside the injunctive writ it
previously issued. Respondent filed a motion for reconsideration but was denied.
Respondent filed a petition for certiorari under Rule 65 before the Court of Appeals. The CA
nullified the Order of the trial court and granted the petition ordering the RTC to issue a writ of
preliminary injunction and the PPA to desist from conducting the public bidding effective until
and after the case a quo shall have been finally decided.
Petitioner sought the reversal of the decision of the appellate court on the following grounds
a) That P.D. No. 1818 as amended by R.A. 8975 and reiterated in Administrative Circular of the
SC, bans the issuance of writs of preliminary injunctions in cases involving government
infrastructure projects and service contracts which includes arrastre and stevedoring contracts; b).
That CISAI has no clear legal right to an injunctive writ since it acquired no vested rights because
its hold-over capacity could be revoked at any given time
Issue:
Whether or not the Court of Appeals erred in ordering the RTC to issue the writ of preliminary
injunction to CISAI.
Ruling:
Yes.
Finally, it is settled that the sole object of a preliminary injunction, may it be prohibitory or
mandatory, is to preserve the status quo until the merits of the case can be heard and the final
judgment rendered. The status quo is the last actual peaceable uncontested status which preceded
the controversy.
In the case at bar, respondent sought the issuance of a writ for preliminary injunction in order
to prevent the cessation of cargo handling services in the port of Dumaguete City to the detriment
and prejudice of the public, shipper, consignees and port workers. However, the factual backdrop
of this case establishes that respondents eight-year contract for cargo handling was already
terminated and its continued operation in the port of Dumaguete City was merely by virtue of a
second hold-over permit granted by petitioner. xxx
By its nature, the hold-over permit was merely temporary in nature and may be revoked by
petitioner at anytime. As we declared in the case of Anglo-Fil Trading Corporation, hold-over
permits are merely temporary and subject to the policy and guidelines as may be implemented by
petitioner. The temporary nature of the hold-over permit should have served as adequate notice to
respondent that, at any time, its authority to remain within the premises of the port of Dumaguete
City may be terminated. Unlike the contract for cargo handling services previously entered into by
petitioner and respondent, whose terms and conditions were agreed upon by the parties herein and
which clearly provided for a specific period of effectivity as well as a stipulation regarding the
notice of violation, the hold-over permit was unilaterally granted by petitioner pursuant to its
authority under the law.
Based on the foregoing, it is clear that at the time of the institution of this suit, respondent no
longer possessed any contract for its continued operation in Dumaguete City and its stay in the
port of said city was by virtue of a mere permit extended by petitioner revocable at anytime by the
latter. Obviously, the writ of preliminary injunction issued by the Court of Appeals granted
respondent the authority to maintain its cargo handling services despite the absence of a valid cargo
handling agreement between respondent and petitioner. For this reason, we hold that the Court of
Appeals erred in ordering the court a quo to issue the writ of preliminary injunction in favor of
respondent.