CA junks MRT3 owners' appeal to stop gov't from getting more trains

MANILA, Philippines – The Court of Appeals (CA) reaffirmed a court decision not to stop the transportation department from acquiring new Metro Rail Transit Line 3 (MRT3) trains from a different supplier.

MRT Holdings II Incorporated, a majority stakeholder of MRT3 owner MRT Corporation (MRTC), went to the CA, after the Makati City Regional Trial Court (RTC) dismissed its petition that sought to stop the government from procuring 48 new light rail vehicles (LRVs) from another supplier, amounting to P3.76 billion.

In a 16-page decision signed by Associate Justice Maria Elisa Sempio Diy, the CA's 12th Division ruled that MRTC and MRT Holdings failed to prove that they would suffer "grave injustice and irreparable injury" if the government is not prevented from acquiring more LRVs from Dalian Locomotive and Rolling Stock of China.

In August 1997, the transportation department and MRTC signed a build-lease-transfer (BLT) agreement for the construction of the MRT3. (READ: DOTC to MRTH II: Drop case vs MRT3 train cars delivery)

It was in 1999 when the 25-year agreement took effect.

MRTC said the transportation department auctioned off procurement of additional LRVs without its consent or waiver of its right of first refusal, violating their BLT agreement.

Mess under MRT3's BLT contract

The private firms sought an injunction as an interim measure to protect their interests, while arbitration in Singapore is ongoing between them and the department. (READ: Aquino on MRT mess: 'Bad politics' to blame)

The arbitration is set to thresh out the conflict on whether the MRT3's private owners can still invoke their right to first refusal to prevent the government from entering into a third-part supply contract with Dalian.

MRTC and MRT Holdings earlier argued that the loss of their right of first refusal – which carries with it the preferential right to supply the LRVs – would result in "irreparable injury."

"The DOTC's procurement of LRVs from Dalian is in contrast to the principle of having a single point of responsibility which underlays the construction, operation, and maintenance of MRT3," the petitioners said.

The MRT3 owners added that if the new LRVs are allowed to run without the necessary adjustment and upgrade to the system, "the riding public would be exposed to high risks of train collisions and loss of lives."

Arguments 'self-serving, uncorroborated'

The CA, however, said that MRTC's and MRT Holdings' arguments are merely "self-serving and uncorroborated" by independent witnesses. 

"Thus, MRTC's assertion that the procurement of additional LRVs by the department constitutes irreparable injury and not compensable by damages is highly speculative and conjectural," the court stated.

The appellate court also agreed with the Makati RTC that under Republic Act No. 8975 or the Alternative Dispute Resolution Act, only the Supreme Court (SC) can prohibit government infrastructure projects from proceeding.

The purchase of 48 LRVs from Dalian is considered a national government project, as it was included in the Investment Priorities Plan approved by Congress.

The trial court, according to the CA, may grant injunctive relief if the matter is of extreme urgency involving a constitutional issue. 

"Bare allegations or invocation that MRTC suffered grave injustice and irreparable injury considering that is constitutionally protected rights were violated will not automatically result in the issuance of an injunctive relief," the CA explained.

The CA said its decision is limited to the issue of the injunction as interim relief, as the main dispute remains pending before the Singapore International Arbitration Center. – with reports from Chrisee Dela Paz/Rappler.com