By Victor V. Saulon
THE PHILIPPINES has asked the High Court of Singapore to “set aside” the first partial award granted to Maynilad Water Services, Inc. in July last year relating to the arbitration case between the government and the privately owned water utility, the listed companies holding stakes in the company said on Wednesday.
DMCI Holdings, Inc. and Metro Pacific Investments Corp. separately told the Philippine Stock Exchange that Maynilad received on Tuesday afternoon an e-mail from the Philippines’ Singapore counsel advising about the application at the Singaporean court seeking to set aside the award.
“While it has yet to be served copies of the summons and the Setting Aside Application, Maynilad is confident that there are no valid and meritorious grounds to challenge or set aside the Arbitral Award, and that the Republic’s latest efforts to frustrate and stonewall the enforcement of the Arbitral Award will fail,” DMCI and Metro Pacific said.
“Maynilad has already engaged Singapore counsel to ensure that the Republic’s baseless application is disposed of expeditiously.”
The July 24, 2017 award by the arbitral tribunal ordered the government to compensate the water utility for revenue losses from March 11, 2015 onwards resulting from the refusal of government’s Metropolitan Waterworks and Sewerage System (MWSS) to implement Maynilad’s rebased tariffs. It upheld the validity of Maynilad’s claim — amounting to P3.4 billion in March 2015-August 2016 — against the Philippines’ undertaking letter issued by the Department of Finance.
“The Arbitral Award upheld the validity of Maynilad’s claim against the Undertaking Letter issued by the Republic, through the Department of Finance, and ordered the Republic to compensate Maynilad for its revenue losses, commencing on 11 March 2015 onwards, resulting from the refusal of the [MWSS] to implement Maynilad’s relevant tariffs,” the companies said.
Sought for comment, the Office of the Solicitor General (OSG) declined to disclose details of the case, citing confidentiality of the proceedings. Erik S. Dy, spokesperson of the OSG, said the first partial award was granted by the Singapore International Arbitration Center. “We are requesting to have the order set aside,” he said, adding that the filing with Singapore’s high court was made on Feb. 9, 2018 through the OSG’s foreign counsel.
“Of course we will oppose kasi (because) we don’t see any reason that they can cite para ma-set aside ‘yun (to set aside the partial award),” Randolf T. Estrellado, Maynilad chief operating officer, told reporters on the sidelines of MWSS’s 140th anniversary celebration on Wednesday.
“In fact they even have an issue on the timing because they only have three months to set aside the ruling. The original ruling came out in July.”
Mr. Estrellado said the OSG took as opportunity a correction in November of the awarded amount, which was reduced by about less than a P100 million.
“Nagkamali lang ng one month (There was an error for one month). Kinapitan nila (They held on to that interpretation). They used the November correction as the starting point for the three months,” he explained.
In the arbitral court’s ruling in July last year, the Philippine government was ordered to reimburse Maynilad a total of P3,424,690,000 for losses from March 11, 2015 to Aug. 31, 2016, but without prejudice to rights that the company may seek against MWSS for losses incurred from Jan. 1, 2013 to March 10, 2015.
The same tribunal also ruled that Maynilad is entitled to recover from the Philippines its losses from Sept. 1, 2016 onwards. It said in case a disagreement on the amount of such losses arises, Maynilad may revert to the tribunal for further determination.
Wednesday saw the stock price of DMCI gain 2.19% to close P14 apiece while that of Metro Pacific dropped 8.65% to finish P5.60 each, making it one of the biggest losers on Wednesday.
Maynilad holds the exclusive concession granted by the MWSS, on behalf of the government, to provide water and sewerage services in the west service area of Metro Manila. Metro Pacific owns 52.8% of Maynilad, while DMCI has a 25% indirect economic interest in the utility.
Metro Pacific Investments Corp., which has majority stake in Maynilad, is one of three Philippine units of Hong Kong-based First Pacific Co. Ltd., the others being Philex Mining Corp. and PLDT Inc. Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has interest in BusinessWorld through the Philippine Star Group, which it controls.