Court stops DOTC's bid to buy 48 trains from China

MANILA, Philippines - The Makati City Regional Trial Court Branch 66 has barred the Department of Transportation and Communications (DOTC) from purchasing 48 light rail vehicles from China's CNR Dalian Locomotive & Rolling Stock Co. as part of the MRT-3 capacity expansion project.

In a two-page order dated January 30, 2014, Presiding Judge Joselito Villarosa granted the petition of the Metro Rail Transit Corp. (MRTC) seeking for a preliminary injunction “as interim measure of protection” through the immediate issuance of a 20-day temporary order of protection” against DOTC.

"Wherefore, premises considered, the ex-parte application for a 20-day temporary order of protection is hereby granted upon the filing of the bond within five days from issuance of this order, in the amount of Pesos 300 million to answer for all damages which respondent may sustain by reason of the TRO if the Court should finally decide that the petitioner was not entitled thereto,” the court's order said.

"Respondent (DOTC), its officials, employees, agents or any person acting in their behalf are hereby restrained from performing any and all acts related in any manner to its procurement of additional LRVs for the MRT3 and from committing any act tending to usurp and to violate the rights of MRTC under section 5.2 and 14.4 of the BLT agreement,” the order added.

The then Metro Rail Transit Corp. Limited (MRTCL) - predecessor of the MRTC - entered into a build-lease-transfer agreement with the DOTC in 1999 to construct and maintain a light rail transit system for EDSA, eventually known as MRT-3.

The court ruled that among the rights assigned to MRTCL and MRTC under the BLT agreement was a provision in paragraph 5.2 that it would only lose its preferential right to supply light rail vehicles in either one of two instances: a) if the MRTC is in breach of its obligation under the BLT Agreement; or b) if the MRTC consents to DOTC’s use of light rail vehicles which were not provided by MRTC.

However, the DOTC awarded the capacity expansion contract to Dalian last month, despite its prior BLT agreement.

"After painstaking and assiduous perusal of the records of the case, the Court finds that there is an urgent need to either a) preserve property, b) prevent the respondent from disposing of, or concealing, the property, or c) prevent the relief prayed for from becoming illusory because of prior notice," the court said in its order.

"The court finds that the reasons given by the petitioners are meritorious. The Court hinges its ruling on the fact that petitioners have neither breached their obligation under the agreement or much more gave its consent to the DOTC pursuant to section 5.2 of their agreement," the court's order added.

The court meanwhile gave DOTC 15 days to file a comment to the order and the petition.