2 weeks ago
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The National Grid Corporation of the Philippines (NGCP) has won its arbitration case against the Power Sector Assets & Liabilities Management Corporation (PSALM) and National Transmission Corporation (TransCo) regarding prepayment validity.
In a disclosure to the Philippine Stock Exchange on Monday, Feb. 24, Synergy Grid and Development Philippines Inc. (SGP) announced that the Singapore International Arbitration Centre (SIAC) tribunal ruled that NGCP's nearly ₱58 billion prepayment to PSALM in 2013 was valid.
This decision concluded an arbitration initiated in February 2018, where NGCP sought validation of its 2013 prepayment and the recovery of approximately ₱4 billion from TransCo under the concession agreement.
PSALM and TransCo countered by alleging NGCP was in concessionaire default due to purported nationality restrictions violations. They also filed counterclaims of ₱2.7 billion, plus interest, related to TransCo’s Excluded Receivables.
After seven years, the tribunal determined that NGCP did not breach nationality restrictions under the Philippine Constitution and the Anti-Dummy Law, and dismissed PSALM and TransCo’s objections to the prepayments.
“PSALM accepted the prepayment as valid and accordingly waived any right that PSALM and TRANSCO may have had to object to the validity of the prepayment, such that they were deemed to have accepted it as fully compliant with the requirements of the Concession Agreement,” it stated.
SGP also reported that the tribunal found NGCP did not breach any obligations regarding indebtedness or insurance under the concession agreement.
Regarding TransCo’s ₱3.9 billion claim, the tribunal awarded TransCo only ₱372.77 million. This amount comprised ₱2.7 million in customer interest, ₱190.87 million in connection and sub-transmission charges from 2007, ₱149.48 million for past revenue, and ₱29.68 million for other claims. The tribunal ordered these sums to be paid with six percent annual interest until full payment.
Furthermore, NGCP's concession fee will be reduced by ₱13.12 billion, and PSALM and TransCo will reimburse NGCP approximately ₱56.53 million for right-of-way expenses, plus six percent interest. Sub-transmission assets (STAs) are excluded from concession fee adjustments, further reducing the fee.
TransCo must also reimburse NGCP ₱51.8 million for its retained obligations, plus six percent interest.
Finally, the tribunal affirmed NGCP's exclusive rights to use transmission assets during its concession period, including for telecommunications, without TransCo interference. However, any property NGCP acquires through eminent domain must be registered under TransCo.
