24. DFA v. Falcon (Brace yourselves, long digest
ahead)Petitioner: DFA & BSPRespondent: Judge Falcon & BCA
International CorporationPonente: eonardo! De CastroDoctrine:
Aninjuryisconsideredirreparableif it isof suchconstant andfrequent
recurrence that no fair and reasonable redress can be had therefor
inacourtoflaw,orwherethereisnostandardbywhichtheiramountcanbemeasured
with reasonable accuracy, that is, it is not susceptible
ofmathematical computation. It is considered irreparable injury
when it cannot beadequately compensated in damages due to the
nature of the injury itself or thenature of the right or property
injured or when there exists no certain pecuniarystandard for the
measurement of damages.ShortFacts:DFA andBCA enteredintoanagree"ent
#orthei"ple"entationo#"achine reada$le passport and visa
pro%ect& Dispute arose $et'een DFAandBCA(PPC (BCA)s assignee)
due to alleged $reaches $y $oth parties& DFA
ter"inateditscontract 'ithBCA& BCAsent anoticeo# de#ault
against DFA& BCA#iled#orar$itration 'ith PD*CI& During the
pendency o# the *e+uest #or Ar$itration, DFA
andBSPenteredintoanagree"ent
#orthelattertoprovidepassportsco"pliant 'ithinternationalstandards
(,!Passports)&BCA therea#ter #iled #or a Petition #or
Interi"*elie# 'ith the *-C o# Pasig& -*. and therea#ter a 'rit
o# preli"inary in%unction 'ereissued$y*-Cdirectedagainst DFA&
DFA #iledtheinstant caseallegingthat -Cco""itted /AD&Facts:
DFAneededtoi"ple"ent the0achine*eada$lePassport and1isaPro%ectunder
theB.-sche"e& -hus, thePBAC(Pre+uali#ication,
BidsandA'ardsCo""ittee)pu$lishedaninvitationtopre+uali#yand$id#orthesupplyo#
theneeded "achine reada$le passports and visas, and conducted the
pu$lic $idding#or the 0*P(1 Pro%ect& PBAC #ound BCA)s $id to $e
the sole co"plying $id2 hence, it per"itted the DFAto engage in
direct negotiations 'ith BCA& BCA, inco"pliance'iththe3oticeo#
A'ard(3.A), incorporatedapro%ectco"pany, the Philippine Passport
Corporation (PPC) to underta4e and i"ple"entthe 0*P(1 Pro%ect&
A Build!.perate!-rans#er Agree"ent (B.- Agree"ent) $et'een DFA and
PPC'assigned& -heB.- Agree"ent
'aslatera"endedtoincludethe#ollo'ingchanges&55Section 9.05.-he
PPC has posted in #avor o# the DFA the per#or"ance security
re+uired #orPhase5o# the0*P(1Pro%ect andshall $edee"ed, #orall
intentsandpurposes, to$e#ullco"pliance $y BCA 'ith the provisions
o# this Article 6& Section 20.15. It is clearly and
e7presslyunderstood that BCA "ay assign, cede and trans#er all o#
its rights and o$ligations under thisA"ended B.- Agree"ent to PPC,
as #ully as i# PPC is the original signatory to this A"endedB.-
Agree"ent,providedho'everthatBCA shall nonetheless$e%ointlyand
severallylia$le'ithPPC#or theper#or"anceo# all
theo$ligationsandlia$ilitiesunder this
A"endedB.-Agree"ent&Project Copletion dates'ere li4e'ise
changed 'hich set the co"pletion o# thei"ple"entationphaseo#
thepro%ect 'ithin58to9:"onths#ro"dateo# e##ectivityo# theA"ended
B.- agree"ent& An Assign"ent Agree"ent 'as e7ecuted $y BCAand
PPC'here$y BCAassigned its rights arising #ro" the A"ended B.-
Agree"ent to PPC& 0*P(1 Pro%ect 'as divided into ; phases,9
'ith each phase having a di##erent seto# ti"eline and due
dates& DFAandBCAi"pute$reacho# theA"endedB.- Agree"ent against
eachother&o DFA< Delay o# pro%ect is due to the su$"ission
o# de#icient docu"entsas 'ell as intervening issues regarding BCA)s
#inancial incapacity&o BCA< DFA #ailed to per#or" its
reciprocal o$ligation to issue to BCA acerti#icate o# acceptance o#
Phase 5 'ithin 5= days 'hich 'as re+uired$y the A"ended B.-&
Further"ore, it alleged that every ne' appointeetothepositiono# DFA
secretary'antedtorevie'thea'ardtoBCAthat)s 'hy it too4 : years #or
DFA to issue said Certi#icate& DFA sent a 3otice o# -er"ination
to BCA and PPC due to their alleged #ailure tosu$"it proo# o#
#inancial capa$ilitytoco"pletetheentire0*P(1Pro%ect
inaccordance'iththe#inancial 'arrantyunderSection>&?9(A)o#
the A"endedB.- Agree"ent& DFA li4e'ise de"anded #or li+uidated
da"ages& BCAsent aletter totheDFAde"andingthat it
i""ediatelyreconsider andrevo4e its previous notice o# ter"ination,
other'ise, BCA 'ould $e co"pelled todeclare the DFA in de#ault
pursuant to the A"ended B.- Agree"ent& @hentheDFA
#ailedtorespondtosaidletter,BCA issueditso'n3oticeo#De#ault against
the DFA, stating that i# the de#ault is not re"edied 'ithin 6?
days,BCA 'ill $e constrained to ter"inate the 0*P(1 Pro%ect and
hold the DFA lia$le#or da"ages& BCA#ileditsRe!"est #or
Ar$itration'iththePhilippineDispute*esolutionCenter (PD*CI)
pursuant toSection56&?9o# the A"endedB.- Agree"ent&BCA)s
re+uest #or Ar$itration sought #or the #ollo'ing relie#so Judg"ent
nulli#yingthe3oticeo# -er"ination$yDFAincludingthede"and to pay
li+uidated da"ages&o Judg"ent con#ir"ing the 3otice o# De#ault
issued $y BCA and orderingDFA to co"ply 'ith its o$ligations under
the A"ended B.-&o A %udg"ent ordering DFA to pa% daa&es to
'CA in the ao"nt o#50( representing lost $usiness opportunities,
#inancing #ees, etc& -herea#ter, the DFA and the BSP entered
into a 0e"orandu" o# Agree"ent #orthe latter to provide the #or"er
passports co"pliant 'ith international standards&-he BSP then
solicited $ids #or the supply, delivery, installation and2 Phase
5< Pro%ect Planning Phase2 Phase 9< I"ple"entation o# 0*P(1
Pro%ect at the Central Facility2 Phase :< I"ple"entation o#
0*P(1 Pro%ect at the *egional Consular .##ices2 Phase=< Full
I"ple"entation, including Foreign Service Posts2 Phase >< In
Service Phase2 Phase ;< -ransition(-urnoverco""issioning o# a
syste" #or the production o# ,lectronic Passport Boo4lets
orePassports -hus, BCA #iled a Petition #or Interi" *elie# under
Section 98 o# the AlternativeDispute *esolution
Acto#9??=(*&A& 3o&698>),'ith
the*egional-rialCourt(*-C) o# Pasig praying #or the issuance o# -*.
restraining DFA and BSP #ro"a'arding a ne' contract to i"ple"ent
the Pro%ect or i# such contract has $eena'arded, #ro" i"ple"enting
such pro%ects& DFA#iledan.pposition(totheApplication#or
-e"porary*estraining.rderand(or @rit o# Preli"inary In%unction
alleging that, as a"ended $y *&A& 3o& AA58,or the
Build.perateand-rans#er (B.-) a'2 and c& .ther related and
necessary activities, such as site ac+uisition, supplyand(or
installation o# e+uip"ent and "aterials,
i"ple"entation,construction, co"pletion, operation, "aintenance,
i"prove"ent repairand reha$ilitation, regardless o# the source o#
#unding&Is the ePassport project coered under !b" projects
coered under #$% laws&'$ SC pointedoutthatDFA representedto
-CthatePassportPro%ect isaB.-pro%ect $ut in their Petition $e#ore
the SC, DFA "erely clai"s that the pro%ect is anational govern"ent
pro%ect under *A 86A=&o -he-C, relyingontherepresentationo# DFA
andagreeing'iththecontention o# BCA, ruled as #ollo's< B-he
prohi$ition against issuance o#-*. and(or 'rit o# preli"inary
in%unction under *A 86A> applies only tonational goernment
infrastructure project covered $y the B.- a'&-he national
govern"ent pro%ects covered under the B.- areenu"erated under
Sec& 9 o# *A ;6>A, as a"ended, other'ise 4no'n asthe B.-
a'& 3ota$ly, it includes Bin#or"ation technology net'or4s
anddata$ase in#rastructure&C In relation to in#or"ation
technology pro%ects,in#rastructure pro%ects re#er to the Bcivil
/or0s coponentsC thereo#& @e cannot "phold the theory o# BCA
and the trial court that the de#inition o# theter" Bin#rastructure
pro%ectC in *epu$lic Act 3o& 658=:should $e applied to theB.-
a'&=o Section > o# *epu$lic Act 3o& 658= pre#aces the
de#inition o# the ter"stherein,
includingtheter"Bin#rastructurepro%ect,C 'iththe#ollo'ingphrase<
BFor purposes o# this ActCo -hereisnolegal orrational
$asistoapplythede#initiono# theter"Bin#rastructure pro%ectC
inonestatute (*A658=) toanother statuteenacted years $e#ore (B.-
la') and 'hich already de#ined the types o#pro%ects it covers&
-hereisalegislativeintent totreat
in#or"ationtechnologypro%ectsdi##erentlyunder the B.- a' and the
/overn"ent Procure"ent *e#or" Act&o Fnder the B.- a', 'herein
the pro%ects are to $e privately #unded, theentirein#or"ation
technology pro%ect,including the ciil wor(sco"ponentandthe
technologicalaspectthereo#,isconsideredanin#rastr"ct"reor
develop"ent pro%ect and treated si"ilarly astraditional
Bin#rastructureC pro%ects& All the rules applica$le to
traditionalin#rastructurepro%ects
arealsoapplica$letoin#or"ationtechnologypro%ects&o In contrast,
under *epu$lic Act 3o& 658= or the /overn"entProcure"ent *e#or"
Act, 'hich conte"plates pro%ects to $e #unded $ypu$lic#unds,
theter"Bin#rastructurepro%ectC/asliitedtoonlytheBcivil /or0s
coponentC o# in#or"ation technology pro%ects&3 *A 658=<
infrastructure projects include the construction, i"prove"ent,
reha$ilitation, de"olition, repair, restoration or "aintenance o#
roads and $ridgesGcivil /or0s coponents o# in#oration
technolo&% projects 7774 *A AA58 (a"ended *A ;6>A)<
private sector infrastructure or deelopment projects are those
nor"ally #inanced and operated $y the pu$lic sector $ut 'hich 'ill
no' $e 'holly or partly i"ple"ented $y the private sector,
including $ut not li"ited toGin#oration technolo&% net/or0s and
data$ase in#rastr"ct"re 777 Civil 'or4s are su$%ect to the
provisions on in#rastructurepro%ects& -echnological are covered
$y the provisions o# procure"ent o#goods& Petitioners presented
no proo# that the ePassport Pro%ect 'as a B.- pro%ect& .nthe
contrary, evidence adduced $y $oth sides tended to sho' that the
ePassportPro%ect 'as a procure"ent contract "nder Rep"$lic Act .o.
91+4o Being a govern"ent procure"ent contract under *epu$lic Act
3o& 658=,onl%thecivil /or0scoponento# theePassport Pro%ect
'ould$econsideredanin#rastructurepro%ect that "aynot $ethesu$%ect
o# alo'er courtissued 'rit o# in%unction under *epu$lic Act 3o&
86A>IstheePassport project coeredunder!a"
)engineeringwor(sorasericecontract* or as )related and necessary
actiities*& '$ Service contractC re#ers to Bin#rastructure
contracts entered into $y anydepart"ent, o##ice or agency o# the
national govern"ent 'ith private entities andnongovern"ent
organiHations #or services related or incidentalto the #unctionsand
operations o# the depart"ent, o##ice or agency concerned&C .n
the other hand, the phrase Bother related and necessary activitiesC
o$viouslyre#erstoactivitiesrelatedtoagovern"ent in#rastructure,
engineering'or4s,service contract or pro%ect under the B.- a' In
other 'ords, to $e considered a service contract or related
activity, petitioners"ust sho' that the ePassport Pro%ect is an
in#rastructure pro%ect or necessarilyrelated to an in#rastructure
pro%ecto DFA #ailedtodothis&
-hereisnothingonrecordtoindicatethat theePassport Pro%ect has a
civil 'or4s co"ponent or is necessarily relatedto an in#rastructure
pro%ect&o @ithin the conte7t o# *epu$lic Act 3o& 658=I'hich
is the governing la'#or theePassport Pro%ectIthesaidPro%ect is not
anin#rastructurepro%ect that is protected #ro"lo'er court
issuedin%unctions under*epu$lic Act 3o& 86A>, 'hich,
toreiterate, has#or itspurposethee7peditious and e##icient
i"ple"entation and co"pletion o# govern"entin#rastructure
pro%ects&-nshort:-heprohi$itionin*epu$lic Act 3o&
86A>isinoperativeinso#arastheePassport is concerned, since
petitioners #ailed to prove that the ePassport Pro%ect isnational
govern"ent pro%ect as de#ined therein.9& @ith respect to
petitioners) contention that BCA'ill su##er no grave andirrepara$le
in%ury so as to %usti#y the grant o# in%unctive relie#, the Court
#inds thatthis particular argu"ent "erits consideration& Fnder
the B.- a' and the A"ended B.- Agree"ent, in the event o# de#ault
onthe part o# the govern"ent (in this case, the DFA) or on the part
o# the proponent,the non de#aulting party is allo'ed to ter"inate
the agree"ent, again su$%ect toproper co"pensation in the "anner
set #orth in the agree"ent& -o ,ven i# 'e hypothetically accept
BCA)s contention that the DFAter"inated the A"ended B.- Agree"ent
'ithout any de#ault or'rongdoing on BCA)s part, it is not
ind"$ita$lethat BCA is entitled toin%unctive relie#& B.- a'
e7pressly allo's the govern"ent to ter"inate a B.- agree"ent,
even'ithout #ault on the part o# the pro%ect proponent, su$%ect to
the pay"ent o# theactual e7penses incurred $y the proponent plus a
reasona$le rate o# return& -i"e and again, this Court has held
that to $e entitled to in%unctive relie# the partysee4ingsuchrelie#
"ust $ea$letosho'grave, irrepara$lein%urythat isnotcapa$le o#
copensation.o @PI
isresortedtoonly'henthereisapressingnecessitytoavoidin%urious
conse+uences 'hich cannot $e re"edied under any
standardco"pensationo -'ore+uisitesarenecessaryi#
apreli"inaryin%unctionistoissue,na"ely< the e7istence o# a right
to $e protected and the#actsagainst
'hichthein%unctionisto$edirectedareviolative o# said right&o It
"ust $e sho'n that the invasion o# the ri&ht sought to $e
protectedis aterial and s"$stantial, that the ri&ht o#
coplainant is clear and"nista0a$le and that there is an urgent and
para"ount necessity #orthe 'rit to prevent serious da"age& o An
in%ury is considered irrepara$le i# it is o# such constant and
#re+uentrecurrence that no #air and reasona$le redress can $e had
there#or in acourt o# la', or 'here there is no standard $y 'hich
their a"ount can $e"easured'ithreasona$leaccuracy,that
is1itisnots"scepti$leo#atheatical cop"tation& It is considered
irrepara$le in%ury 'hen itcannot $e ade!"atel% copensated in
da"ages due to the nature o#thein%uryitsel# orthenatureo# theright
orpropertyin%uredor'hentheree7ists nocertainpecuniarystandard#or
the"easure"ent o#da"ages& In this case, 'hether this is a
ter"ination $y the DFA alone 'ithout #ault on thepart o# BCA or a
ter"ination due to de#ault on the part o# either party, the B.-a'
and the A"ended B.- Agree"ent lay do'n the "easure o#
co"pensationto $e paid under the appropriate circu"stances&
Signi#icantly, inBCA)s*e+uest #or Ar$itration'iththePD*CI, it
prayed#or,a"ong others,Ba %udg"ent ordering respondent JDFAK to pay
da"ages toClai"ant JBCAK, reasona$ly esti"ated at P>?0& All
the purported da"ages thatBCA clai"s to have su##ered $y virtue o#
the DFA)s ter"ination o# the A"endedB.- Agree"ent are plainly
deter"ina$le in pecuniary ter"s and can $eBreasona$ly esti"atedC
according to BCA)s o'n 'ords&*ther points noted $% SC 2dahil
$i$o %"n& na&s"lat n& 0aso3: In see4ing to en%oin the
govern"ent #ro" a'arding or i"ple"enting a "achinereada$le passport
pro%ect or any si"ilar electronic passport or visa pro%ect
andpraying #or the "aintenance o# the status +uo ante pending the
resolution on the"eritso# BCA)s*e+uest #or Ar$itration,
BCAe##ectivelysee4stoen%ointheter"ination o# the A"ended B.-
Agree"ent #or the (RP45 Project& -here is nodou$t that the
0*P(1 Pro%ect is a pro%ect covered $y the B.- a' and, in
turn,considered a Bnational govern"ent pro%ectC under *epu$lic Act
3o& 8A6>&o As national govern"ent pro%ect, -Cs are
prohi$ited #ro" issuing a -*.or @PI against the govern"ent to
restrain or prohi$it the ter"ination orrescission o# any such
national contract(pro%ect&> For i# a pro%ect proponent is
allo'ed to en%oin the ter"ination o#itscontract onthegroundthat it
iscontestingthevalidityo#said ter"ination, then the govern"ent 'ill
$e una$le to enterinto a ne' contract 'ith any other party 'hile
the controversyispendinglitigation& .$viously, acourt)sgrant o#
in%unctiverelie# in such an instance is pre%udicial to pu$lic
interest sincegovern"ent 'ould $e inde#initely ha"pered in its duty
toprovide vital pu$lic goods and services in order to preserve
theprivate proprietary rights o# the pro%ect proponent&o
Although BCA did not speci#ically pray #or the trial court to
enjoin theterination o# the Aended '*) A&reeentand thus, there
is nodirect violation o# *epu$lic Act 3o& 8A6>, a grant o#
in%unctive relie# asprayed #or $y BCA 'ill indirectl% contravene
the sa"e statute& BCA contends that i# no in%unctive relie#
'ill $e issued in its #avor, the a'ard o#ePassport pro%ect
'ould$etanta"ount toaviolationo# property'ithout dueprocess o# the
la'&o -he relationship o# DFA to BCA is pri"arily contractual
and their disputeinvolves the ad%udication o# contractual
rights& -he propriety o# the DFA)sacts,
inrelationtotheter"inationo# the A"endedB.- Agree"ent,should $e
gauged against the provisions o# the contract itsel# BCA)s petition
#or interi relie# $e#ore the trial court is essentiall% a petition
#ora provisional reed% ancillar% to its Re!"est #or Ar$itration in
PDRC-& BCAspeci#ically prayed that the trial court grant it
interi" relie# pending theconstitution o# the ar$itral tri$unal in
the said PD*CI case& Fn#ortunately, duringthe pendency o# this
case, PD*CI Case 'as dis"issed #or lac4 o# %urisdiction, invie' o#
the lac4 o# agree"ent $et'een the parties to ar$itrate $e#ore the
PD*CIo -hedis"issal o# theprincipal actionthusresultsinthedenial o#
theprayer #or theissuanceo# the'rit& 7 7 7&C Invie'o#
interveningcircu"stances, BCA can no longer $e granted in%unctive
relie# and thecivil case $e#ore the trial court should $e
accordingly dis"issed5 Relax. Ung discussion na mahaba sa taas
refers to ePassport. Itong sinasabi ng ! dito refersto "RP#$
Pro%ect. Pero sana ito nalang sinabi nila agad para tapos na
&anina pa.
