MANILA, Philippines – The National Grid Corporation of the Philippines (NGCP) claimed victory in its arbitration case against the Power Sector Assets & Liabilities Management Corporation (PSALM) and the National Transmission Corporation (TransCo).
Synergy Grid & Development Philippines Incorporated (SGP), which holds a 40.2% stake in NGCP, said in a stock exchange disclosure that the Arbitral Tribunal of the Singapore International Arbitration Centre ruled in favor of NGCP in its final decision.
The Arbitral Tribunal found that the NGCP did not breach the nationality restrictions in the Constitution, the Anti-Dummy Law, and its obligations under the concession agreement. These restrict foreign ownership of certain businesses such as utility operators.
It also found that the NGCP validly exercised its right to make the P57.8 billion prepayment on July 15, 2013.
“NGCP shall only pay approximately P372.7 million to TransCo out of its claim of around P3.9 billion,” SGP said in a disclosure on Monday, February 24.
The Arbitral Tribunal also found the NGCP was entitled to a P56.5 million indemnification from PSALM and TransCo on right of way claims, including interest.
TransCo was also directed to reimburse NGCP P51.84 million for the grid operator’s retained obligations with a 6% annual interest rate.
The decision came seven years after the NGCP filed an arbitration case over its concession agreement with the two agencies.
The NGCP sought a declaration that its P57.8 billion payment made on July 15, 2013 was valid. It also wanted to uphold payment or monetary claims worth P4 billion “which should have been borne by TransCo under concession agreement, but were advanced by NGCP.”
PSALM and TransCo argued that the NGCP defaulted on the concession deal for supposedly violating the nationality restrictions for the ownership of public utilities.
The two also refuted NGCP’s financial claims and pursued P2.7 billion in counterclaims, plus interest, concerning TransCo’s excluded receivables.
PSALM President and Chief Executive Officer Dennis dela Serna said they referred the matter to the Office of the Government Counsel, which serves as PSALM and TransCo’s counsel for the case.
“We want to assure the public that both PSALM and TransCo are fully committed to protecting the interests of the Filipino people and that we will act in accordance with law,” Dela Serna said.
SGP, a listed firm on the Philippine Stock Exchange, voluntarily halted trading for an hour on Monday, February 24, after disclosing the victory.
As of writing, SGP’s share price jumped 1.20% to P11.84 apiece. – Rappler.com