DEPARTMENT OF FOREIGNAFFAIRS and BANGKOSENTRALNG PILIPINAS,- versus -HON. FRANCO T. FALCON, IN HISCAPACITY AS THE PRESIDINGJUDGEOFBRANCH71OFTHEREGIONAL TRIAL COURT INPASIG CITY and BCAINTERNATIONAL CORPORATION,Respondents.G.R. No. 17667September 1, 2010D E C I S I O NLEONARDO!DE CASTRO, J."Before the Court is a Petition for Certiorari and prohibition under Rule 65 of the Rules of Court with a praer forthe issuan!e of a temporar restrainin" order and#or a writ of preliminar in$un!tion %led b petitioners &epartment of'orei"n ()airs *&'(+ and Ban",o Sentral n" Pilipinas *BSP+. Petitioners pra that the Court de!lare as null and -oid the.rder/10 dated 'ebruar 11, 2002 of respondent 3ud"e 'ran!o 4. 'al!on *3ud"e 'al!on+ in Civil Case No. 71079, whi!h"ranted the appli!ation for preliminar in$un!tion %led b respondent BC( 5nternational Corporation *BC(+.6i,ewise,petitioners see, to pre-ent respondent 3ud"e 'al!on fromimplementin"the!orrespondin"7rit of Preliminar5n$un!tion dated 'ebruar 28, 2002/20 issued pursuant to the aforesaid .rder.4he fa!ts of this !ase, as !ulled from the re!ords, are as follows9Bein" a member state of the 5nternational Ci-il (-iation .r"ani:ation *5C(.+,/80 the Philippines has to !ompl withthe !ommitments and standards set forth in 5C(. &o!ument ;o. R4&s+/50 b (pril 2010. 4hus, in line with the &'(s mandate to impro-e the passport and -isa issuan!e sstem, as well as the stora"eand retrie-al of its related appli!ation re!ords, and pursuant to our "o-ernments 5C(. !ommitments, the &'( se!uredthe appro-al of the President of the Philippines, as Chairman of the Board of the ;ational ?!onomi! and &e-elopment(uthorit *;?&(+, for the implementation of the >a!hine Readable Passport and @isa Pro$e!t *the >RP#@ Pro$e!t+ underthe Build-.perate-and-4ransfer *B.4+ s!heme, pro-ided for b Republi! (!t ;o. 6RP#@ Pro$e!t was de%ned as follows9Section 1.02 MRP/V Project refers to allthea!ti-ities andser-i!esunderta,en inthe ful%llment of the >a!hineReadable Passport and @isa Pro$e!t as de%ned in the Re=uest for Proposals *R'P+, a !op of whi!h is hereto atta!hed as(nneD(,in!ludin"butnot limitedtopro$e!t %nan!in",sstemsde-elopment,installationandmaintenan!einthePhilippines and 'orei"n Ser-i!e Posts *'SPs+, trainin" of &'( personnel, pro-ision of all pro$e!t !onsumables *related totheprodu!tionof passports and-isas, su!has printer supplies, et!.+, s!annin"of appli!ationand!iti:enshipdo!uments, !reation of data bases, issuan!e of ma!hine readable passports and -isas, and site preparation in theCentral 'a!ilit and Re"ional Consular .E!es *RC.s+ nationwide./A0 .n (pril 5, 2002, former &'( Se!retar 4eo%sto 4. Fuin"ona and Bonifa!io Sumbilla, this time as BC( President, si"nedan (mended B.4 ("reement/RP#@Pro$e!t and shall be deemed, for all intents and purposes, to be full !omplian!e b BC( with the pro-isions of this(rti!le RP#@ Pro$e!t whi!h set the!ompletionoftheimplementationphaseof thepro$e!twithin1Ato 28months from thedate ofe)e!ti-it ofthe(mendedB.4("reementasopposedtothepre-iousperiodfoundintheori"inal B.4("reementwhi!hsetthe!ompletion within 1A to 28 months from re!eipt of the ;4P *;oti!e to Pro!eed+ in a!!ordan!e with the Pro$e!t >asterPlan..n (pril 12, 2002, an (ssi"nment ("reement/120 was eDe!uted b BC( and PPC, whereb BC( assi"ned and !eded itsri"hts, title, interest and bene%ts arisin" from the (mended B.4 ("reement to PPC.(s set out in (rti!le A of the ori"inal and the (mended B.4 ("reement, the >RP#@ Pro$e!t was di-ided into siD phases9P#a$% 1. P&o'%() P*ann+n, P#a$% 4he Pro$e!tProponent/BC(0shall preparedetailedplansandspe!i%!ations ina!!ordan!e with (nneD ( of this /(mended0 B.4 ("reement within three *8+ months from issuan!e of the ;4P *;oti!eto Pro!eed+ /from the date of e)e!ti-it of this (mended B.4 ("reement0. 4his phase shall be !onsidered !ompleteupon the re-iew,a!!eptan!e andappro-al b the &'(of these plans andthe resultin" >aster Plan,in!ludin" the>aster S!hedule, the business pro!ess spe!i%!ations, the a!!eptan!e !riteria, amon" other plans. D D D D 4he &'( must appro-e all detailed plans as a !ondition pre!edent to the issuan!e of the C( /Certi%!ate of (!!eptan!e0for Phase 1.P#a$% -. I./*%.%n)a)+on o0 )#% MRP12 P&o'%() a) )#% C%n)&a* Fa(+*+)3 7ithin siD *6+ months from issuan!e ofthe C( for Phase 1, the PR.3?C4 PR.P.;?;4 /BC(0 shall !omplete the implementation of the >RP#@ Pro$e!t in the &'(Central 'a!ilit, andestablishthenetwor,desi"nbetweenthe&'(Central 'a!ilit, theten*10+ RC.s/Re"ionalConsular .E!es0 and the ei"ht *A0+ 'SPs /'orei"n Ser-i!e Posts0.D D D DP#a$% 4. I./*%.%n)a)+on o0 )#% MRP12 P&o'%() a) )#% R%,+ona* Con$5*a& O6(%$ 4his phase represents therepli!ation of the sstems as appro-ed from the Central 'a!ilit to the RC.s throu"hout the !ountr, as identi%ed inthe R'P /Re=uest for Proposal0. 4he appro-ed sstems are those implemented, e-aluated, and %nall appro-ed b &'(as des!ribed in Phase 1. 4he Pro$e!t Proponent /BC(0 will be permitted to be"in site preparation and the s!annin" anddatabasebuildin"operationsinall oE!esassoonastheplansarea"reeduponanda!!epted. 4hisin!ludessitepreparation and database buildin" operations in these Phase-8 oE!es.7ithin siD *6+ months from issuan!e of C( for Phase 2, the Pro$e!t Proponent /BC(0 shall !omplete site preparation andimplementation of the appro-ed sstems in the ten *10+ RC.s, in!ludin" a full fun!tional networ, !onne!tion betweenall e=uipment at the Central 'a!ilit and the RC.s.P#a$% 7. F5** I./*%.%n)a)+on, +n(*5d+n, a** Fo&%+,n S%&8+(% Po$)$ 7ithin three *8+ to ei"ht *A+ months fromissuan!e of the C( for Phase-8, the Pro$e!t Proponent /BC(0 shall !omplete all preparations and full implement theappro-ed sstems in the ei"ht *A0+ 'SPs, in!ludin" a full fun!tional networ, !onne!tion between all e=uipment atthe Central 'a!ilit and the 'SPs. Cpon satisfa!tor !ompletion of Phase 1, a C( shall be issued b the &'(.P#a$% . In S%&8+(% P#a$% .peration and maintenan!e of the !omplete >RP#@ 'a!ilit to pro-ide ma!hine readablepassports and -isas in all desi"nated lo!ations around the world.P#a$% 6. T&an$+)+on1T5&no8%& 4ransition#4urno-er to the &'( of all operations and e=uipment, to in!lude an orderltransferofownershipofall hardware, appli!ationsstemsoftwareanditssour!e!odeand#orli!enses*sub$e!ttoSe!tion 5.02/H0+, peripherals, leaseholdimpro-ements, phsi!al and!omputerse!uritimpro-ements,(utomated'in"erprint 5denti%!ation Sstems, and all other >RP#@ fa!ilities shall !ommen!e at least siD *6+ months prior to theend of the /(mended0 B.4 ("reement. 4he transition will in!lude the trainin" of &'( personnel who will be ta,in" o-ertheresponsibilitiesofsstemoperationandmaintenan!efromthePro$e!tProponent/BC(0. 4hePro$e!tProponent/BC(0 shall bear all !osts related to this transfer./180 *7ords in bra!,ets appear in the (mended B.4 ("reement+ 4o pla!e matters in the proper perspe!ti-e, it should be pointed out that both the &'( and BC( impute brea!h of the(mended B.4 ("reement a"ainst ea!h other. (!!ordin" to the &'(, delas in the !ompletion of the phases permeated the >RP#@ Pro$e!t due to the submission ofde%!ient do!uments as well as inter-enin" issues re"ardin" BC(#PPCs supposed %nan!ial in!apa!it to full implementthe pro$e!t. .n the other hand, BC( !ontends that the &'( failed to perform its re!ipro!al obli"ation to issue to BC( a Certi%!ate of(!!eptan!e of Phase 1 within 11 wor,in" das of operation purportedl re=uired b Se!tion 11.01 of the (mended B.4("reement. BC( bewailed that it too, almost three ears for the &'( to issue the said Certi%!ate alle"edl be!ausee-er appointee to the position of &'( Se!retar wanted to re-iew the award of the pro$e!t to BC(.BC( further alle"edthat it was the &'(s refusal to appro-e the lo!ation of the &'( Central 'a!ilit whi!h pre-ented BC( from pro!eedin"with Phase 2 of the >RP#@ Pro$e!t. 6ater, the &'( sou"ht the opinion of the &epartment of 'inan!e *&.'+ and the &epartment of 3usti!e *&.3+ re"ardin"the appropriate le"al a!tions in !onne!tion with BC(s alle"ed delas in the !ompletion of the >RP#@ Pro$e!t.5n a 6etterdated 'ebruar 21, 2005,/110 the &.3 opined that the &'( should issue a %nal demand upon BC( to ma,e "ood on itsobli"ations, spe!i%!all on the warranties and responsibilities re"ardin" the ne!essar !apitali:ation and the re=uired%nan!in" to !arr out the >RP#@ Pro$e!t. 4he &.3 used as basis for said re!ommendation, the 6etter dated (pril 1RP#@ Pro$e!t.4hus, on 'ebruar 22, 2005, &'( sent a letter/160 to BC(, throu"h its pro$e!t !ompan PPC, in-o,in" BC(s %nan!ialwarrantunderSe!tion5.02*(+of the(mendedB.4("reement./120 4he&'(re=uiredBC(tosubmit*a+proof ofade=uate !apitali:ation *i.e., full or substantial pament of sto!, subs!riptions+B *b+ a ban, "uarantee indi!atin" thea-ailabilit of a !redit fa!ilit of P200 millionB and *!+ audited %nan!ial statements for the ears 2001 to 2001.5n repl to &'(s letter, BC(, throu"h PPC, informed the former of its position that its %nan!ial !apa!it was alreadpassed upon durin" the pre=uali%!ation pro!ess and that the (mended B.4 ("reement did not !all for an additional%nan!ial re=uirements for the implementation of the >RP#@ Pro$e!t. ;onetheless, BC( submitted its %nan!ialstatements for the ears2001 and 2002 and re=uested for additionaltime withinwhi!h to !ompl with the other%nan!ial re=uirements whi!h the &'( insisted on./1A0(!!ordin" to the &'(, BC(s %nan!ial warrant is a !ontinuin" warrant whi!h re=uires that it shall ha-e the ne!essar!apitali:ation to %nan!e the >RP#@ Pro$e!t in its entiret and not on a per phase basis as BC( !ontends..nl uponsuE!ientproofofits%nan!ial !apabilitto!ompleteandimplementthewholepro$e!twill the&'(sobli"ationto!hoose and appro-e the lo!ation of its Central 'a!ilit arise. 4he &'( asserted that its appro-al of a Central 'a!ilit sitewas not ministerial and upon its re-iew, BC(s proposed site for the Central 'a!ilit was purportedl una!!eptable interms of se!urit and fa!ilities. >oreo-er, the &'( alle"edl re!ei-ed !onGi!tin" oE!ial letters and noti!es/1RP#@Pro$e!tina!!ordan!ewiththe%nan!ial warrantunderSe!tion 5.02*(+ of the (mended B.4 ("reement. 4he ;oti!e states9(fter a !areful e-aluation and !onsideration of the matter, in!ludin" the reasons !ited in our letters dated >ar!h 8,>a 8, and 3une 20, 2005, and upon the re!ommendation of the .E!e of the Soli!itor Feneral *.SF+, the &epartmentis of the -iew that our !ontinuin" default in !omplin" with the re=uisite ban, "uarantee and#or !redit fa!ilit, despiterepeated noti!e and demand, is le"all un$usti%ed.5n li"ht of the fore"oin" !onsiderations and upon the instru!tion of the Se!retar of 'orei"n ()airs, the &epartmentherebformall4?R>5;(4?*si!+ theSub$e!t (mendedB.4("reement dated5(pril 2005*si!+/280 e)e!ti-e0andaluon" Cit,within %-e das from re!eipt of the (rbitral (wardB and8. ( $ud"ment orderin" respondent /&'(0 to pa dama"es to Claimant /BC(0, reasonabl estimated at P50,000,000.00as of this date, representin" lost business opportunitiesB %nan!in" fees, !osts and !ommissionsB tra-el eDpensesB le"alfees and eDpensesB and !osts of arbitration, in!ludin" the fees of the arbitrator#s./2a 22, 2006,/810 re=uested for an eDtension of time to %le its answer, withoutpre$udi!e to $urisdi!tional and other defenses and ob$e!tions a-ailable to it under the law. Subse=uentl, howe-er, in aletterdated>a2RP#@Pro$e!twhi!h BC( was !arrin" out for the &'(.4hus, BC( %led a Petition for 5nterim Relief/850 under Se!tion 2A of the (lternati-e &ispute Resolution (!t of 2001 *R.(.;o. r. Bonifa!io Sumbilla,its President, >r. Celestino >er!ader, 3r. from the 5ndependent @eri%!ation and @alidation Contra!tor !ommissioned bthe &'( under the (mended B.4 ("reement, and &'( (ssistant Se!retar &omin"o 6u!enario, 3r. as ad-erse partwitness.4he &'( and the BSP did not present an witness durin" the hearin"s for BC(s appli!ation for preliminarin$un!tion. (!!ordin" to the &'( and the BSP, the trial !ourt did not ha-e an $urisdi!tion o-er the !ase !onsiderin"that BC( did not pa the !orre!t do!,et fees and that onl the Supreme Court !ould issue a 4R. on the biddin" for anational"o-ernmentpro$e!t li,e the e-Passport Pro$e!t pursuantto the pro-isionsof Republi! (!t ;o. Aotion /*i+ 4o 6ift 4emporarRestrainin" .rderB and *ii+ 4o &ismiss the Petition0 dated 3anuar 81, 2002./120 4he &'( and the BSP %led their separateReplies *to BC(s .mnibus Comment+ dated 'ebruar otionfor 5ssuan!eof a4emporarRestrainin".rderand#or 7rit ofPreliminar 5n$un!tion dated >ar!h 5, 2002./1A0.n >ar!h 12, 2002, the Court re=uired BC( to %le its !omment on the said petition within ten das from noti!e and"ranted the .E!e of the Soli!itor Fenerals ur"ent motion for issuan!e of a 4R. and#or writ of preliminar in$un!tion,/1otion dated (u"ust 12, 2002, for the re!onsideration of the Resolution dated 3une 1, 2002, prain" that the 4R.issued on >ar!h 12, 2002 be lifted and that the petition be denied.5n a Resolution dated September 10, 2002,/580 the Court denied BC(s Cr"ent .mnibus >otion and "a-e due !ourse tothe instant petition. 4he parties were dire!ted to %le their respe!ti-e memoranda within 80 das from noti!e of theCourts September 10, 2002 Resolution.Petitioners &'( and BSP submit the followin" issues for our !onsideration 5SSC?S57H?4H?R .R ;.4 4H? R?SP.;&?;4 3C&F? FR(@?6I (BCS?& H5S &5SCR?45.; (>.C;45;F 4. 6(CJ .R ?KC?SS .'3CR5S&5C45.; 7H?; H? 5SSC?& 4H? (SS(56?& .R&?R, 7H5CH ?''?C45@?6I ?;3.5;?& 4H? 5>P6?>?;4(45.; .' 4H??-P(SSP.R4 PR.3?C4 -- ( ;(45.;(6 F.@?R;>?;4 PR.3?C4 C;&?R R?PCB65C (C4 ;.. ACCH (S9*5+R?SP.;&?;4 BC( H(S ;.4 ?S4(B65SH?& ( C6?(R R5FH4 4H(4 C(; B? PR.4?C4?& BI (; 5;3C;C45.;B(;&*55+ R?SP.;&?;4 BC( H(S ;.4 SH.7; 4H(4 54 7566 SCS4(5; FR(@? (;& 5RR?P(R(B6? 5;3CRI 4H(4 >CS4 B?PR.4?C4?& BI (; 5;3C;C45.;. .; 4H? C.;4R(RI, 54 5S 4H? '565P5;. P?.P6?, 7H. P?4545.;?RS PR.4?C4, 4H(47566 SCS4(5; S?R5.CS (;& S?@?R? 5;3CRI BI 4H? 5;3C;C45.;./510(t the outset, we dispose of the pro!edural ob$e!tions of BC( to the petition, to wit9 *a+ petitioners did not follow thehierar!h of !ourts b %lin" their petition dire!tl with this Court, without %lin" a motion for re!onsideration with theR4C and without %lin" a petition %rst with the Court of (ppealsB *b+ the person who -eri%ed the petition for the &'( didnot ha-e personal ,nowled"e of the fa!ts of the !ase and whose appointment to his position was hi"hl irre"ularB and*!+the-eri%!ationbthe(ssistantFo-ernorandFeneral Counsel oftheBSPofonlsele!tedpara"raphsofthepetition was with the purported intent to mislead this Court. (lthou"h the dire!t %lin" of petitions for certiorari with the Supreme Court is dis!oura"ed when liti"ants ma still resorttoremedies withthe lower !ourts,we ha-einthepasto-erloo,ed the failureof apart tostri!tladheretothehierar!h of !ourts on hi"hl meritorious "rounds. >ost re!entl, we relaDed the rule on !ourt hierar!h in the !aseof Roue- .r. v. Commission on +lections-/550 wherein we held9 T#% /o*+(3 on )#% #+%&a&(#3 o0 (o5&)$, whi!h petitioners indeed failed to obser-e, +$ no) an +&on!(*ad &5*%. 'orindeedtheCourt hasfull dis!retionarpower tota,e!o"ni:an!eandassume$urisdi!tionof spe!ial !i-il a!tionsfor certiorari and mandamus %led dire!tl with it 0o& %9(%/)+ona**3 (o./%**+n, &%a$on$ o& +0 :a&&an)%d ;3 )#%na)5&% o0 )#% +$$5%$ !learl and spe!i%!all raised in the petition./560 *?mphases ours.+ 4he Court deems it proper to adopt a similarl liberal attitude in the present !ase in !onsideration of thetrans!endental importan!eof anissueraisedherein. 4hisisthe%rst timethat theCourt is!onfrontedwiththe=uestion of whether an information and !ommuni!ation te!hnolo" pro$e!t, whi!h does not !onform to our traditionalnotion of the term infrastru!ture, is !o-ered b the prohibition on the issuan!e of !ourt in$un!tions found in Republi!(!t;o. Ar. Custodio *whi!h, as we alread stated, BC( failed to pro-e+ would not ne!essaril render the -eri%!ation defe!ti-efor he !ould ha-e -eri%ed the petition purel on the basis of authenti! re!ords. (s for the assertion that the partial -eri%!ation of (ssistant Fo-ernor and Feneral Counsel 3uan de Luni"a, 3r. was forthepurposeof misleadin"thisCourt, BC(li,ewisefailedtoaddu!ee-iden!eonthispoint. Foodfaithisalwaspresumed. Para"raph 8 of >r. Luni"as -eri%!ation indi!ates that his partial -eri%!ation is due to the fa!t that he is-erifin" onl the alle"ations in the petition pe!uliar to the BSP. 7e see no reason to doubt that this is the true reasonfor his partial or sele!ti-e -eri%!ation. 5n sum, BC( failed to su!!essfull rebut the presumption that the oE!ial a!ts *of >r. Custodio and >r. Luni"a+ weredone in "ood faith and in the re"ular performan!e of oE!ial dut./5A0 ?-en assumin" the -eri%!ations of the petitionsu)ered from some defe!t, we ha-e time and a"ain ruled that /t0he ends of $usti!e are better ser-ed when !ases aredetermined on the merits after all parties are "i-en full opportunit to -entilate their !auses and defenses rather thanon te!hni!alit or some pro!edural imperfe!tions./5RP#@ Pro$e!t, pro-ided the desi"nated substitute BC( is =uali%ed under eDistin" laws anda!!eptable to the &'(. 4his substitute BC( shall hereinafter be referred to as the Substitute BC(. 4he Substitute BC(shall assumeall theBC(sri"htsandpri-ile"es, aswell astheobli"ations, dutiesandresponsibilitieshereunderBpro-ided, howe-er, that the &'( shall at all times and its sole option, ha-e the ri"ht to in-o,e and eDer!ise an otherremed whi!h ma be a-ailable to the &'( under an appli!able laws, rules and#or re"ulations whi!h ma be in e)e!tat an time and from time to time. 4he &'( shall !ooperate with the !reditors with a -iew to fa!ilitatin" the !hoi!e of aSubstitute BC(, who shall ta,e-o-er the operation, maintenan!e and mana"ement of the >RP#@ Pro$e!t, within three*8+ months from the BC(s re!eipt of the noti!e of termination from the &'(. 4he Substituted BC( shall ha-e all theri"hts and obli"ations of the pre-ious BC( as !ontained in this (mended B.4 ("reementB orC. Ta