Synergy Grid & Development Philippines Inc. announced on Monday that the Singapore International Arbitration Centre’s arbitral court has ruled in favor of its subsidiary, National Grid Corp. of the Philippines (NGCP), in its claims against state-owned Power Sector Assets & Liabilities Management Corp. (PSALM) and National Transmission Corp. (TRANSCO).
The arbitral court, whose decision is final and binding on the parties, ruled that NGCP did not breach the nationality restrictions outlined in the Philippine Constitution, the Anti-Dummy Law, or its obligations under the concession agreement, specifically regarding permitted indebtedness and insurance.
In addition, the court sided with NGCP on a prepayment issue, confirming that the company made a prepayment of P57.88 billion on 15 July 2013. The court determined that NGCP only needs to pay approximately P372.77 million to TRANSCO, a significant reduction from TRANSCO’s original claim of around P3.9 billion.
Regarding the agreed difference for projects under construction, the court ruled that the amount of P10.106 billion will be converted into US dollars at an exchange rate of P49.62, as claimed by NGCP. This will further reduce the concession fee to be paid by NGCP.
Furthermore, NGCP was awarded indemnification of up to P56.5 million from PSALM and TRANSCO for expenses related to right-of-way claims, including interest. The court also decided that NGCP should be reimbursed by TRANSCO for its retained obligations of P51.8 million.
The arbitral court also affirmed that NGCP holds exclusive rights and responsibilities during the concession period, including the preparation of the transmission development plan and the ability to deal directly with regulators without prior approval from TRANSCO. The court also clarified that NGCP has exclusive rights to use the transmission assets for related businesses, such as telecommunications systems, during the concession period.
Finally, the tribunal stated that any documented property rights acquired by NGCP through the power of eminent domain must be registered in the name of TRANSCO.
