Supreme Court OKs BSP-Orient Bank compromise deal

MANILA, Philippines - The Supreme Court (SC) has given the go-signal for the implementation of the compromise agreement settling the P2.97-billion obligation of Orient Commercial Banking Corp. (OCBC) with the Bangko Sentral ng Pilipinas (BSP).                                                                                                 

In an eight-page ruling, the first division of the high court junked a petition of the central bank seeking to amend its civil suit against the bank by adding more names in the list of respondents for being moot and academic.

The SC noted that both parties had already executed a compromise deal that was approved by the Manila regional trial court Branch 12 on Dec. 29, 2003.

The SC upheld the ruling of the Court of Appeals last June 12, which nullified the writs of preliminary attachment issued by the trial court and ordered the dismissal of the civil suit. 

“With the final settlement of the claims of petitioner against herein respondents, the issues raised in the present petition regarding the propriety of the issuance of writ of attachment by the trial court and the grave abuse of discretion allegedly committed by the appellate court in reversing the orders of the trial court, have now become moot and academic,” said the ruling penned by Associate Justice Martin Villarama Jr.

“A moot and academic case is one that ceases to present a justiciable controversy by virtue of supervening events, so that a declaration thereon would be of no practical use or value. In such cases, there is no actual substantial relief to which petitioner would be entitled to and which would be negated by the dismissal of the petition,” it added.

Under the compromise agreement, the parties agreed to cause the dismissal of the 19 pending civil cases in various courts, including the present case before the SC, in consideration for the compliance by the respondents of the agreed terms and conditions of payment of the total deficiency obligation of OCBC to BSP in the amount of P2,974,903,000.

Court records show that on Feb. 13, 1998, OCBC declared a bank holiday for its failure to pay its obligations to depositors, creditors and the BSP.

On March 17, 1998, OCBC filed a petition for rehabilitation with the Monetary Board and subsequently, the bank was placed under receivership of the Philippine Deposit Insurance Corp. (PDIC).

PDIC then took over all the assets, properties, obligations and operations of OCBC.

 Respondent Jose Go, the principal and biggest stockholder of OCBC, with his affiliate companies, challenged PDIC’s actions before the Manila RTC but was later dismissed, prompting them to elevate the case to the CA.

The BSP then filed with the Manila RTC Branch 12 on Dec. 17, 1999 a complaint for sum of money with preliminary attachment against the respondents seeking to recover the amount of P2.97 billion.

The trial court, on Jan. 14, 2000, granted BSP’s motion for preliminary attachment and a corresponding writ was issued ordering the deputy sheriffs to attack real properties of OCBC and other respondents.

The OCBC then elevated the case to the CA which reversed the ruling of the trial court and dissolved the writ of attachment.

The BSP brought the case before the SC through a petition for certiorari assailing the CA ruling.

While petition was pending, however, the parties came up with a compromise agreement to resolve the dispute, prompting the Court to declare BSP’s petition moot and academic.