A ruling of the Supreme Court of Singapore that favors an arbitral decision that sided with Maynilad Water Services Inc. has become final, bolstering the company’s P3.4-billion claim of indemnity from the Philippine government.
DMCI Holdings Inc., a minority shareholder in Maynilad, said in a disclosure to the Philippine Stock Exchange that the decision became final on Oct. 4 after the Philippine government decided to no longer elevate the case to the Court of Appeal, the higher division of Singapore’s Supreme Court.
The ruling dated Sept. 4, issued by the High Court—the lower division of Singapore’s Supreme Court—dismissed an application from the Philippine government to set aside an arbitral decision ordering Malacañang to compensate Maynilad for its revenue losses.
Maynilad had demanded that the Department of Finance compensate the water service concessionaire for losses resulting from “the refusal of the MWSS [Metropolitan Waterworks and Sewerage System] to implement Maynilad’s tariff adjustment for the period 2013 to 2017.”
The adjustment relates to rate increases that include the recovery of corporate income tax.
The arbitral tribunal that decided in favor of Maynilad is part of the International Chamber of Commerce based in Singapore.
Maynilad officials yesterday said the compensation amount covered only losses incurred from March 11, 2015, to Aug. 31, 2016—the period relevant to the case brought to arbitration. A second arbitration case is still pending.
Also, they said the arbitral decision did not affect any rights that Maynilad had to seek recourse against MWSS for losses incurred from Jan. 1. 2013 to March 10, 2015—the time starting from the new rate-basing period when the rate increase was supposed to take effect up to when Maynilad sought arbitration.
In its 2015 annual report, Maynilad said the delay in the implementation of the arbitral award had cost the company more than P5.6 billion in revenue losses as of December 2015.
Maynilad continues to incur losses at an average of P157 million a month of delay, the company said.