Preliminary Injunction vs. Government Bidding: PPA v. Cipres Stevedoring (G.R. No. 145742)
The Supreme Court ruled that courts cannot stop government cargo handling bids, and that a hold-over permit creates no vested right to a contract.
When can a private operator ask a court to stop a government bidding? In Philippine Ports Authority v. Cipres Stevedoring & Arrastre, Inc., G.R. No. 145742 (14 July 2005), the Supreme Court answered that question for cargo handling contracts — and the answer is a narrow one. The case matters to any business holding an expiring government contract or a provisional permit, because it explains why a "hold-over" arrangement is not a right that courts will protect with an injunction.
The dispute over the Port of Dumaguete
Cipres Stevedoring & Arrastre, Inc. (CISAI) had operated cargo handling at the Port of Dumaguete since 1976. In 1991, the Philippine Ports Authority (PPA) awarded it an eight-year contract, which expired on 31 December 1998. CISAI continued operating under hold-over permits, the last of which was valid only until 18 April 2000.
The applicable rules changed in the meantime. PPA Administrative Order No. 03-90 provided that cargo handling contractors with satisfactory performance ratings were entitled to renewal. CISAI had earned a "very satisfactory" rating. But on 15 February 2000, while CISAI's hold-over permit was still in effect, PPA issued Administrative
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