Chavit group files case against Mislatel

The venture between Ilocos politician Luis “Chavit” Singson and TierOne has moved forward with a lawsuit in a bid to disqualify the winning bidder in the third telco race.

Digiphil Technologies Inc., part of TierOne which was disqualified in the third telco selection process, sued Mindanao Islamic Telephone Co. alongside the franchise holder’s chair, Danilo Cortez, and president, Nicanor Escalante, for breach of contract.

Digiphil is asking the Pasig Regional Trial Court to declare its contract with Mindanao Islamic as valid while accusing the latter of “fraudulent practice” by hiding details of their agreement before the National Telecommunications Commission.

Should the case prosper, it would open up slew of possibilities, including the cancellation of Mindanao Islamic’s deal with businessman Dennis Uy’s Udenna Corp. and China Telecom.

The Udenna-China Telecom venture, known as Mislatel Consortium, was confirmed as the new major telco player on Nov. 19. Its disqualification would trigger a rebidding process given that there are no other qualified groups left in the running.

In its lawsuit, Digiphil pointed to its P10-million agreement with Mindanao Islamic signed on May 30, 2018, that gave it at least one seat on the latter’s board.

Digiphil stated in the filing that it had entered into the deal to provide affordable broadband services and also venture in the third telco selection process— a view that Mindanao Islamic later denied in a statement.

According to Digiphil, the agreement included both exclusivity and a right of first refusal, which required Mindanao Islamic to seek the consent of Digiphil before partnering or selling shares to any other group.

Digiphil added that it had also settled Mindanao Islamic’s liabilities to the NTC to the tune of P162,515 on Sept. 26 this year, the filing showed.

Discussions between the two appeared to break down starting Oct. 1. Digiphil noted that during a meeting with Mindanao Islamic over its “lack of performance,” their officials were surprised when the latter indicated “they were free to entertain other offers.”

By Oct. 5, Mindanao Islamic informed Digiphil that it was terminating their agreement, stating that the contract did not apply to the third telco initiative. A copy of the contract, however, showed that a broad range of activities were covered, including venturing into “cellular mobile telephony.”

Mindanao Islamic had offered to refund the P10 million but, a spokesman for TierOne said, they did not accept the amount.

The group of Singson and TierOne eventually tapped franchise holder Sear Telecommunication. However, their group was disqualified on Nov. 7 for lack of required bid security documents.

Another group, Philippine Telegraph & Telephone Corp., was also disqualified for failing to meet the technical requirements. PT&T has filed a separate case seeking to undo its disqualification before the Supreme Court.