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Thursday, October 29, 2009 | MANILA, PHILIPPINES
Corporate News
High tribunal orders Olongapo court to resolve Subic-PLDT row
THE SUPREME Court has ordered the Olongapo Regional Trial Court to further look into the exclusivity rights claimed by PLDT unit Subic Telecommunications Company, Inc. (Subictel) within the Subic free port.
In a 17-page decision penned by Associate Justice Presbitero J. Velasco, Jr., the third division of the high court said the trial court, as well as the Court of Appeals, were wrong when they dismissed the petition filed by Subictel.
As such, “the remand of the case to the [trial court] is in order, thereby allowing Subic Telecom to substantiate its assertions on the existence of its rights and the alleged breach by [Subic Bay Metropolitan Authority or SBMA] of its obligations....”
Philippine Long Distance Telephone (PLDT) Co., Inc. and the American Telephone and Telegraph Co. (AT&T) entered into a 25-year renewable joint venture agreement with the government entity on June 29, 1994 to provide telecommunications and related services within the free port zone. The firm came to be known as Subictel.
To ensure that its viability would not be restricted, SBMA agreed that it would not enter into contracts in the next 10 years with other parties. Subictel was allowed to renew this non-competition clause for three five-year periods. During the 10-year period however, Subictel faced financial difficulties brought about by the Asian crisis. In November 1999 and January 2001, SBMA and AT&T sold their respective equity interests to PLDT.
PLDT, as the owner of Subictel, thereafter notified SBMA on April 22, 2004 that it was exercising its option to renew the exclusivity privilege of the contract. The request fell on deaf ears however. SBMA said it would secure the Office of the Government Corporate Counsel’s (OGCC) interpretation of the non-competition clause. While waiting for this however, it started accepting applications from other telecommunications firms, including rival Innove Communications, Inc.
Subictel thereafter formally asked the government agency to defer proceedings on its competitor’s application. This was denied on Sept. 30, 2004.
The OGCC issued an opinion on Nov. 10, 2004, which stated that the exclusivity option refers only to competition posed by SBMA itself. As such, the latter rejected anew Subictel’s complaint against the application of Innove. Innove was given an 18-month provisional authority to operate within the economic zone on Feb. 17, 2006.
Subictel asked for a reconsideration. Sensing it would not get an answer however, it decided to go to the Olongapo Regional Trial Court on May 16, 2006. In a decision dated June 30, 2006 however, the trial court dismissed the petition on the ground of litis pendentia. This is legal parlance for a situation wherein a subject matter is being heard in two courts. The trial court said Subictel has already lodged a complaint before SBMA itself.
Mediaquest Holdings, Inc., a unit of the PLDT Beneficial Trust Fund, has a minority stake in BusinessWorld. -- Ira P. Pedrasa
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