MANILA, Philippines - SMC Global Power Holdings Corp, the power generation arm of San Miguel Corp., has scored an initial victory in its dispute with the Power Sector Assets and Liabilities Management Corp. (PSALM).
This after the Regional Trial Court of Mandaluyong City issued a 72-hour temporary restraining order, enjoining PSALM from terminating its independent power producer administration agreement with South Premiere Power Corp.
The agreement covers the appointment of SPPC, a wholly-owned unit of SMC Global Power Holdings, as the independent power producer of the Ilijan power plant in Batangas City.
The TRO also prohibited PSALM from treating SPPC as being in default and from performing any act to pursue collection of supposed unpaid generation payments and other payments.
SPPC and PSALM are currently locked in a dispute arising from the interpretations of certain provisions related to generation payments under the Ilijan IPPA agreement as disclosed in the audited financial statements of SMC Global Power.
“In a letter dated Aug. 12, 2015, SPPC initiated a dispute resolution process with PSALM as provided under the terms of the Ilijan IPPA agreement,” San Miguel said in a disclosure to the Philippine Stock Exchange (PSE) yesterday.
However, on Sept. 4 PSALM advised SPPC that it was terminating the Ilijan IPPA agreement because of the latter’s alleged failure to settle the alleged outstanding generation payments and called on the performance bond in the form of a stand-by letter of credit of SPPC with ANZ Bank amounting to $60 million.
SPPC filed a complaint to nullify the termination notice of PSALM.