PHINMA ENERGY Corp. on Wednesday sued state-owned Power Sector Assets and Liabilities Management Corp. (PSALM) and its former president for damages relating to the termination of an administration agreement over geothermal power plants in Leyte.
In a disclosure to the stock exchange on Wednesday, Phinma Energy said it had filed before the Regional Trial Court of Makati City a complaint for damages with prayer for a writ of preliminary injunction or a writ of preliminary mandatory industry against PSALM and its former president Emmanuel R. Ledesma, Jr.
It has also sought a temporary restraining order (TRO) against the defendants.
The case seeks to stop the termination of the deal — on grounds of administrator’s default — for the selection and appointment of independent power producer administrators (IPPAs). The deal involves the “strips of energy” of the Unified Leyte Geothermal Power Plants (ULGPP) located in Tongonan town of Leyte.
“The grant of the prayer for a TRO will restrain PSALM from terminating the Agreement on the ground of Administrator’s Default and prevent PSALM from asserting any further claim to the detriment of the Corporation. In the event that the Court rules in favor of PHINMA Energy, the Agreement may be invalidated and an award for damages may be made to the Corporation. An adverse decision may open the Company to possible financial claims by PSALM,” the company said.
To recall on Nov. 7, 2013, Phinma Energy, then known as Trans-Asia Oil and Energy Development Corp., was declared one of the winning bidders with the right to administer 40 megawatts (MW) “strips of energy” from ULGP.
On Nov. 8, 2013, Typhoon Yolanda hit the Eastern Visayas, resulting in extensive damage to the ULGPP. It was only a year later that PSALM awarded the “strips” to the winning bidders.
Phinma Energy said it had formally sought the renegotiation of the agreement with PSALM, even proposing several measures for relief. The company had written PSALM to express the difficulties the administrators suffered under the agreement.
Through its counsel, Phinma Energy said it had written a letter exercising its right to withdraw from the agreement.
“Discussions on the termination were initiated,” it said.
The company, however, received a notice from PSALM of the administrator default, it said. The government agency also resolved to terminate the agreement and forfeit the performance bond.
Shares in Phinma Energy were unchanged at P1.81 each on Wednesday. — Victor V. Saulon