Title: Nerwin Industries Corporation vs PNOC

Citation: G.R. No. 167057 April 11, 2012

Topic: Injunction on Government Projects or Contracts

X- Nerwin Y – NEA Z - PNOC

Question

X emerged as the lowest bidder for all schedules/components of the bidding of

government agency Y for contract 1, for the supply and delivery of materials needed in the
country’s Rural Electrification Project. However, Y allegedly held negotiations with other bidders
relative to contract 1, prompting private respondent X to file a complaint for specific performance
with prayer for the issuance of an injunction. X also filed a civil action in the RTC against
government agency Z alleging that its invitation to bid for project B was an attempt to subject a
portion of the items covered by contract 1 to another bidding; and praying that a TRO issue to
enjoin respondents proposed bidding for the materials. RTC granted the injunction and TRO.

Is the RTC correct?

Answer

No.

The law expressly prohibits any court, except the Supreme Court, from issuing any
temporary restraining order (TRO), preliminary injunction, or preliminary mandatory injunction to
restrain, prohibit or compel the Government, or any of its subdivisions or officials, or any person
or entity, whether public or private, acting under the Governments direction, from: ; (b) bidding
or awarding of a contract or project of the National Government; This prohibition shall apply in
all cases, disputes or controversies instituted by a private party, including but not limited to
cases filed by bidders or those claiming to have rights through such bidders involving such
contract/project. This prohibition shall not apply when the matter is of extreme urgency involving
a constitutional issue, such that unless a temporary restraining order is issued, grave injustice
and irreparable injury will arise.

In the case at bar, Y and Z are instrumentalities of the government, involved in

government infrastructure projects, and are therefore covered in the enumeration provided
under the law. On the other hand, X failed to show that there was extreme urgency involving a
constitutional issue causing grave injustice or irreparable injury that would warrant the grant of
temporary restraining order. It’s case merely involves a bidding and contract dispute and thus,
the exception to the prohibition on the grant of injunction or TRO against government
projects/contracts shall not apply. Therefore, the RTC erred in granting the injunction and TRO.