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THE government will settle an arbitration case with
Societe Generale de Surveillance (SGS) SA of Switzerland, the
Department of Finance confirmed Tuesday.
In a statement, Finance
Undersecretary Gil Beltran said the Philippines would pay the
Geneva-based goods inspector P6.2 billion in two equal installments
this year and next year.
“In light of a recent ruling of
the International Centre for the Settlement of Investment Disputes
favoring SGS and the Commission of Audit’s recognition of
government’s financial obligation to SGS, we believe this
settlement is in the government’s best interest,” Beltran said.
He added the settlement amount is
lower than the total SGS billings for services rendered from
September 1998 to March 2000 amounting to 206 million Swiss francs
or P8.5 billion.
“We have already considered
[the amount] as debt many years ago and included it in our budget,
so we see no problem in raising that,” Beltran said in an
interview.
SGS had said the company and the
Philippine government have reached an agreement on the settlement of
receivables associated with pre-2002 discontinued pre-shipment
inspections contracts, the company said Monday.
“I am delighted that we could
bring this matter to a fruitful conclusion. We are now, finally, in
a position to put these matters behind us. For this, the Board of
Directors of SGS thanks the Government of the Republic of the
Philippines for their continuous, constructive cooperation during
the settlement process,” Sergio Marchionne, SGS chairman, said.
The settlement will be recognized
in SGS’ consolidated accounts as an exceptional item, the
statement said.
SGS also said the agreement is
registered as an award of the International Center for the
Settlement of Investment Disputes.
SGS sued the government for
nonpayment of over P6 billion in preshipment inspection services it
rendered.
--Chino S. Leyco
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