Wednesday, January 8, 2014

RTC issues TRO vs City Hall


NAGA CITY — Two branches of the Regional Trial Court here issued separate orders, directing the City Government of Naga, represented by Mayor John Bongat, and all persons acting for and in his behalf, to cease and desist from unilaterally taking over the operation and management of the Central Bus Terminal by January 1, 2014.

In the first order, Hon. Judge Zaida Aurora B. Garfin of RTC Branch 19 said that the Temporary Restraining Order which she issued last December 26 will be valid until January 16, 2014. In the same order, the honorable court also directed the plaintiff to post a bond in the amount of one million (Php 1,000,000.00) pesos. The amount is to be held accountable for whatever damages that the defendant city may sustain by reason of the issuance of the injunctive relief, if the court finally adjudges that the applicant is not entitled thereto.

It will be recalled that plaintiff FPM Corporation, represented by its president Fortunato P. Mendoza filed an civil complaint against the City Government of Naga, represented by Mayor John Bongat, for Injunction, Breach of Contract, Specific Performance and Damages with Prayer for a Temporary Restraining or Status Quo Order, and for a Judicial Declaration of the Nullity of Executive Order Nos. 2013 – 030 and 2013-030 –A, and Sangguniang Panlungsod Resolution No. 20`3-308.

A summary hearing for the application for temporary restraining order was held last December 10 and 17, 2013.

FPM Corporation said in its petition that it is the operator of the Central Bus Terminal, based on the Lease Management Agreement effective July 16, 2008 until July 16, 2013.

When their contract ended, another Management Agreement (extension), dated 17 July 2013 was entered into by the parties.

The purpose of the extension, the plaintiff said, was to give the City Government sufficient time to secure the most advantageous offer or arrive at the best option, guarantee a more transparent and competitive bidding process in the selection of the new Central Bus Terminal Operator.
The extension which was ratified by the Sangguniang Panlungsod under Resolution No. 2013-186, was to expire December 31, 2013.

Again, the main reason was to give the city government sufficient time within which to complete the bidding and award process for the new contract will serve the best interest of the city.

However, sometime in November 2013, the plaintiff claimed, the defendant thru the City Mayor issued Executive Order Nos. 2013-030 and 2013- 030-A, dated October 29, 2013. Said executive order established the Central Bus Terminal Transition Committee to prepare the city government for the eventual handover of the facility by FPM Corporation by year-end for its intended operation on an interim basis. As such, Resolution No. 2013-308 was adopted, stating therein the intention of the city government, the management, in the interim, the Central Bus Terminal starting January 1, 2014 as recommended by the City Development Council thru Resolution No 4, series of 2013.

Unilateral takeover

FPM claims that the unilateral takeover of the management and operation of CBT, even in the interim period is arbitrary, capricious and malicious, calculated to take away from the plaintiff, the status of being the existing operator and deprive it of its vested right to the renewal of the existing Management Agreement.

The defense

The defendant, for its part, argued that FPM is not entitled to the issuance of s a TRO because the policy as embodied in the City Ordinance 2002-049 is to make the process in the selection of a private operator competitive and transparent. It did not preclude the City from assuming  the management and operation of CBT. The ordinance, as contended by defendant , only set the procedure for the selection of the best offer to operate the terminal.

The city government stated that it is not precluded from operating and managing the CBT, because it would run contrary to the proprietary rights of the city as owner of CBT.

After the evaluation of the contending arguments, the court said the plaintiff has an ostensible right to the relief, hence the grant of the TRO.

Meanwhile, in a separate case, pending with Branch 62 the Honorable Court also directed the defendants to desist from taking over the management and operation of the Central Bus Terminal, pursuant to Ordinance No. 2013-062.

Presiding Judge Antonio C.A. Ayo, Jr., set the hearing for the prayer for a writ of preliminary injunction today, January 8, 2014.
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