SC asked to scrap TRO on installation of online lotto terminals in Luzon

MANILA, Philippines—Lottery equipment and service provider Pacific Online Systems Corp. has asked the Supreme Court to junk a lower court order restraining the state-owned Philippine Charity Sweepstakes Office from installing and operating any of the former’s online lottery terminals in Luzon.

In a disclosure to the Philippine Stock Exchange on Wednesday, the Pacific Online said it has filed a petition for certiorari and/or prohibition against Makati Regional Trial Court presiding judge branch 143 Rommel Baybay.

A few months ago, Baybay granted a prayer for a writ of preliminary injunction against the PCSO, acting on a petition by the Philippine Gaming Management Corp., the local gaming unit of the Malaysian conglomerate Berjaya.

Pacific Online is not a party to the PGMC’s case but it filed this petition for certiorari or a petition questioning the validity of Makati RTC’s ruling, especially as the court order will affect the company.

PGMC, for its part, has accused the present management of the PCSO of favoring its rival, Pacific Online, by allowing the latter to enter into what it deems to be its “exclusive” Luzon territory without any bidding.

“Pacific Online stands to be prejudiced by the RTC-Makati’s order granting PGMC’s application for a writ of preliminary injunction,” the disclosure said.

In its petition, Pacific Online assailed the Makati RTC’s issuance writ of preliminary injunction, claiming the following:

* The remedy availed of by PGMC was “clearly erroneous”;

* There was wanton disregard of Pacific Online’s right to its due process of law; and

* There was “obvious absence” of factual and legal basis for the issuance of the injunctive writ.

Through its petition, PGMC seeks to hold PCSO and its board of directors liable for contempt of court for supposedly disregarding the RTC-Makati’s decision affirming an earlier arbitral award of the Integrated Bar of the Philippines.

Pacific Online said that in a prior controversy, PGMC and PCSO had gone into arbitration before the IBP, which issued an arbitral award recognizing the validity of the equipment lease agreement between the parties.

The disclosure noted that PGMC had invoked a provision in the equipment lottery agreement that supposedly conferred on it exclusive rights in providing the equipment for PCSO’s lottery operations in the Luzon area. Relying on this provision, PGMC seeks to nullify a subsequent agreement entered into between PCSO and Pacific Online for the lease of additional lottery equipment for the Luzon area.

“Instead of directly contesting the validity of the subsequent agreement between PCSO and Pacific Online through an action for specific performance and/or annulment of contract, PGMC filed a petition for indirect contempt against PCSO and its board of directors, excluding Pacific Online from the proceedings, yet asking for reliefs that, if granted, will definitely adversely affect the latter,” the disclosure said.

Earlier, the PCSO refuted allegations by the Berjaya group of the state-run agency’s use of “illegal” measures in farming out contracts on providing lottery equipment and service. PCSO chairperson Margarita Juico said her agency only had national interest as its foremost consideration.

“PCSO exists primarily to serve the poor and the marginalized. As custodians of charity funds, it is also our duty to make sure that agreements signed with suppliers are fair and reasonable,” Juico said in an earlier press statement.

“We have reviewed our legal options carefully and there is nothing that indicates we are reneging on any agreement or contract,” she said.

PGMC had also claimed hat the PCSO had been “relentless in its efforts to bring PGMC down,” saying that it had demanded for the reduction in rental rates on the lotto equipment by as much as 50 percent but giving Pacific Online “better deals.”

“At least two national institutions—the Commission on Audit and the Senate Blue Ribbon Committee—\had pointed out that it’s time to review the terms of the contract with PGMC, which both institutions had described as disadvantageous to the government,” Juico said.

“Pacific Online’s presence in the Luzon market effectively curbs monopolistic pricing. National interest is best served by creating a healthy competition where parties are compelled to offer competitive and reasonable rates,” she said.