The Supreme Court in Ernesto B. Francisco, Jr. v. UEM-Mara Philippines Corporation, Toll Regulatory Board and Public Estates Authority held that Presidential Decree (PD) 1818 prohibits courts from issuing injunctions against infrastructure projects of the government, which includes the collection of toll fees for the Manila-Cavite Toll Expressway Project (MCTEP). This ruling underscores the importance of preventing delays in government infrastructure projects and supports the collection of toll fees as a necessary part of project execution, affirming the Toll Operation Agreement’s (TOA) validity and enforceability.

Coastal Road Tolls: Can Courts Halt Infrastructure Projects?

The case revolves around the Manila-Cavite Toll Expressway Project (MCTEP), a vital infrastructure undertaking involving the construction, operation, and maintenance of expressways connecting Metro Manila and Cavite. Private respondent UEM-MARA Philippines Corporation (UMPC) entered into a Toll Operation Agreement (TOA) with the government, represented by the Toll Regulatory Board (TRB) and the Public Estates Authority (PEA). This agreement authorized UMPC to collect toll fees from users of the R-1 Expressway, also known as the Coastal Road. Petitioner Ernesto B. Francisco, Jr., a taxpayer and Coastal Road user, filed a petition seeking to prohibit the collection of these toll fees, arguing they were exorbitant and lacked proper public notice. The Regional Trial Court (RTC) initially granted a preliminary injunction, but the Court of Appeals (CA) reversed this decision, leading to the present appeal to the Supreme Court. The central legal question is whether PD 1818 bars the issuance of an injunction against the toll fee collection, given the nature of the MCTEP as a government infrastructure project.

The Supreme Court addressed the applicability of PD 1818, which explicitly states that “[n]o court in the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction…in any case, dispute or controversy involving an infrastructure project…of the government…to prohibit any person or persons, entity or governmental official from proceeding with…the execution or implementation of any such project…or pursuing any lawful activity necessary for such execution, implementation or operation.” This law aims to prevent disruptions to essential government projects, promoting economic development. The petitioner argued that the Coastal Road’s toll collection was not an infrastructure project and that the project did not constitute a government capital investment since it was financed by a foreign group. The respondents countered that the MCTEP involved rehabilitation and upgrading of the Coastal Road, falling under the definition of infrastructure projects, and that toll collection was crucial for the project’s financial viability.

The Court sided with the respondents, affirming the CA’s decision and emphasizing that infrastructure projects include not only construction but also improvement and rehabilitation of roads. Even if the Coastal Road was merely upgraded, it still fell within the scope of PD 1818. The Court stated that “Undeniably, the collection of toll fees is part of the execution or implementation of the MCTEP as agreed upon in the TOA. The TOA is valid since it has not been nullified. Thus it is a legitimate source of rights and obligations. It has the force and effect of law between the contracting parties and is entitled to recognition by this Court.” The Court also highlighted that the government owns the expressways under the TOA, further solidifying the project’s status as a government infrastructure project.

Petitioner further argued that PD 1818 should not extend to injunctions against administrative acts involving factual controversies or the exercise of discretion in technical cases, citing previous cases that courts could intervene on issues involving questions of law. The Supreme Court clarified that while this principle holds, courts must refrain from interfering in matters requiring the expertise and discretion of administrative bodies, absent a clear showing of grave abuse of discretion. “Grave abuse of discretion implies a capricious, arbitrary and whimsical exercise of power. The abuse of discretion must be patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law, as not to act at all in contemplation of law or where power is exercised in an arbitrary and despotic manner by reason of passion or hostility.“

The Court noted that the imposition and collection of toll fees are technical matters best addressed by the TRB and PEA, given their charters and expertise. The PEA, under Section 5(k) of PD 1084, is authorized to “impose or collect fees or tolls for their use provided that all receipts by [PEA] from fees, tolls and other charges are automatically appropriated for its use.” Similarly, the TRB, under Section 3 of PD 1112, is tasked to supervise the collection of toll fees and “[i]ssue, modify and promulgate from time to time the rates of toll that will be charged the direct users of toll facilities.” In this case, the petitioner’s arguments challenged the validity of the TOA itself, a matter for the RTC to decide. Absent proof of irregularities or abuse of discretion by public respondents, the presumption of regularity in official duty prevails.

Finally, the Court addressed the motion to cite UMPC and its counsels for contempt, alleging misrepresentation regarding UMPC’s stockholders and disrespectful language toward the RTC judge. The Court found no deliberate falsehood or misrepresentation, as the statements truthfully indicated that UEM and MARA were former stockholders. The phrase “then represented by its stockholders MARA and UEM” implied their replacement, and the ownership structure was not material to the injunction issue. Additionally, the description of the judge as “insufficiently-informed” was not deemed disrespectful, abusive, or slanderous. The Court reiterated that the power to punish for contempt should be exercised judiciously and sparingly, for correction and preservation of the court’s dignity, not for retaliation.

In conclusion, the Supreme Court denied the petition, upholding the CA’s decision and emphasizing the prohibition against injunctions for government infrastructure projects under PD 1818. The collection of toll fees for the R-1 Expressway, a component of the MCTEP, is a necessary activity for the project’s execution. The Court underscored the MCTEP’s importance to support the development of the Calabarzon area, particularly Cavite. It clarified that the decision was limited to the injunction issue, leaving the substantive issues, such as the TOA’s validity, for the RTC to resolve.

FAQs

What was the key issue in this case?	The central issue was whether the courts could issue a preliminary injunction to stop the collection of toll fees for the Coastal Road, part of the Manila-Cavite Toll Expressway Project (MCTEP), given the provisions of Presidential Decree (PD) 1818.
What is PD 1818?	PD 1818 is a law that prohibits courts from issuing restraining orders or preliminary injunctions in cases involving infrastructure projects of the government to prevent delays in essential government projects.
What is the Manila-Cavite Toll Expressway Project (MCTEP)?	The MCTEP is a major infrastructure project involving the design, construction, operation, and maintenance of expressways connecting Metro Manila and Cavite, including the Coastal Road (R-1 Expressway).
What was the petitioner’s main argument?	The petitioner argued that the toll fees were exorbitant, lacked proper public notice, and that the collection of toll fees was not an infrastructure project covered by PD 1818.
What was the Court’s ruling on the definition of infrastructure projects?	The Court ruled that infrastructure projects include not only the construction of roads but also the improvement and rehabilitation of existing roads, such as the upgrading of the Coastal Road.
What is the Toll Operation Agreement (TOA)?	The TOA is the agreement between UEM-MARA Philippines Corporation (UMPC) and the Philippine government, through the Toll Regulatory Board (TRB) and Public Estates Authority (PEA), authorizing UMPC to collect toll fees for the MCTEP.
Did the Court find any abuse of discretion by the Toll Regulatory Board (TRB) or Public Estates Authority (PEA)?	No, the Court found no evidence of grave abuse of discretion by the TRB or PEA in imposing and collecting the toll fees, as they were acting within their mandated powers and in accordance with the TOA.
What was the outcome of the motion to cite UMPC and its counsels for contempt?	The Court denied the motion to cite UMPC and its counsels for contempt, finding no deliberate falsehood or misrepresentation in their statements and no disrespectful language toward the RTC judge.
What is the significance of this case?	This case underscores the importance of PD 1818 in protecting government infrastructure projects from disruptive injunctions, ensuring the smooth execution and implementation of essential projects for economic development.

This case clarifies the scope and application of PD 1818, providing a legal framework that supports the timely completion of government infrastructure projects. By upholding the validity of toll collection agreements, the Supreme Court balanced public interest with private rights. This decision ensures that critical infrastructure projects can proceed without undue interruption. This contributes to economic growth and public welfare.

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Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Ernesto B. Francisco, Jr. v. UEM-Mara Philippines Corporation, G.R. Nos. 135688-89, October 18, 2007