Settlement in PCSO, Australian firm row over thermal paper contract pushed

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INSTEAD of going through a rigorous court process, government counsels are pushing for a possible settlement of a legal conflict between the Philippine Charity Sweepstakes Office (PCSO) and an Australian firm over the manufacture and supply of thermal paper to all lotto outlets.

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This proposal was raised by lawyers of the PCSO from the Office of the Government Corporate Counsel during a hearing at the Makati Regional Trial Court (RTC) Branch 59.

Former Solicitor General Romeo Dela Cruz, counsel for TMA Australian Pty Ltd. said they still welcome the move as it will hasten the resolution of the case although they did not expect the suggestion to come from government lawyers representing PCSO.

TMA, a leading manufacturer of thermal paper and other paper products in the Asia Pacific and Australia, had earlier asked the court to cite for indirect contempt of PCSO.

This is due to the alleged refusal of the agency to observe a temporary restraining order (TRO) on the award to TMA of the manufacture and supply of thermal paper to PCSO lotto outlets nationwide in accordance with the joint venture agreement (JVA).

But the succeeding PCSO Board, chaired by Margarita Juico, revoked the JVA saying the deal was “disadvantageous to the government.”

The Australian firm then questioned the revocation saying it was aboveboard and went through the process.

The Makati RTC granted TMA’s prayer for a TRO on May 13, 2011 as it stopped the PCSO from revoking the contract.

However, the PCSO, according to Dela Cruz, defied the court’s order in utter contempt of court when it refused to implement the JVA.

“Sometime in April 2013 and after the issuance of the TRO, Plaintiff started to send several letters to PCSO requesting for the issuance of Purchase Orders but to date no response has been received by the Plaintiffs,” she said.

Dela Cruz said the PCSO’s inventory level in Luzon will be depleted in January 2014 and it should be ordering its consumables by September 2013 since TMA needs at least 90 days lead time to produce and manufacture of products before delivery.

He added that in utter defiance of the court’s order, the PCSO entered into a contract with Pacific Online Systems Corp. for the establishment of additional lotto outlets and the supply of lotto equipment including bet slips and thermal paper (roll) in violation of the JVA.

Before September 19, 2011, when the right of the past suppliers of PCSO of specialized paper had not yet expired, and after the issuance of the TRO, de la Cruz said, Juico and her board had ordered and obtained deliveries of specialized paper from said suppliers that were far in excess of the then lotto paper requirements.

“Obviously, it was a blatant move so that PCSO could stock up on lotto paper in anticipation of the expiration of the right of the past suppliers to make supplies for the JV to take over, thus circumventing the JV,” Dela Cruz said.

He added that “the new violations of the CJVA are likewise contemptuous because they constitute disobedience to and disregard of the Honorable Court’s Order dated May 13, 2011 and the writs of preliminary prohibitory and mandatory injunction,” he said.

Presiding Judge Winlove Dumayas then ordered a case conference on the case for a possible settlement on November 11, 2013 at 8:30 a.m.

TMA said it is the only thermal paper plant set up in the country using high-tech machinery in the production of thermal paper and other paper products while other local suppliers have to import thermal papers being utilized by government agencies, airlines and other private firms. RITCHIE A. HORARIO

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