Maynilad files 2nd arbitration case vs PH

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Maynilad Water Services, a utility firm controlled by the Manny Pangilinan-led Metro Pacific Investments Corp. (MPIC), has taken the Philippine government to another arbitration panel in Singapore over its failure to grant the company’s P3.44-billion in financial claims arising from delays in implementing a water rate hike.

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In a disclosure to the Philippine Stock Exchange (PSE) on Monday, Maynilad said it served the Philippine government a notice of arbitration and statement of claim on March 27. The notice was coursed through the Department of Finance (DOF).

In bringing the issues to arbitration, Maynilad asked the government to compensate the company for losses amounting to P3.44 billion.

“Maynilad served the Republic the Notice of Arbitration and Statement of Claim following the latter’s failure/refusal to pay the amount indicated in the Demand Letters. Pursuant to the Undertaking, the arbitration proceedings shall be conducted in Singapore before a three-man panel,” Maynilad said.

Because of the refusal of the Metropolitan Waterworks and Sewerage System (MWSS) to implement rate adjustments as earlier ordered by an arbitration panel, Maynilad claims it lost P3.4 billion from January 1, 2013 to February 28, 2015.

The company said that under the sovereign undertaking, the government undertook to compensate Maynilad if its rate adjustments are delayed by the MWSS.

The West Zone concessionaire had earlier won an arbitration case against the government for an average P3.06 per cubic meter rate increase.

In an earlier arbitration proceeding, the International Chamber of Commerce (ICC) awarded Maynilad its proposed three-year implementation of an adjustment in basic charges.

But this was not honored and implemented by the MWSS, which argued that Maynilad’s claims have no legal basis.

MWSS earlier decided not to take further action on proposed water rate adjustments in Metro Manila until the arbitration process for both metro water concessionaires—Maynilad and Ayala-led Manila Water Co. Inc. —have been completed.

The MWSS said it would be more prudent to wait for the conclusion of the arbitration with Manila Water before making any pronouncements about tariff adjustments.

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2 Comments

  1. If the government does not abide by the contracts it has agreed to, then it’s only fair to bring them to court. I doubt anyone would take it lightly if the government just seized their land and businesses, using its monopoly on violence.

  2. Why is the Government being cowed by this companies into paying exorbitant fees being imposed by a court which has nothing to do with Philippine Government Affairs.. Maynilad is a water concessionaire that has been authorized and granted franchise by NAWASA which is a Government Agency to distribute water in parts of Metro Manila and as such they had to abide by Government actions. If Maynilad thinks that they are loosing in their investment then sell the franchise or return back to the government the business of distributing water. It seems that the Philippine government has lost it’s authority in regulating private companies that is out to make quick money at the expense of the government and it’s citizens…It’s about time the Government assert it’s authority..