Gov't asks Singapore High Court to set aside arbitral award favoring Maynilad

MANILA, Philippines — The Philippine government is seeking the reversal of an arbitral award that favors Maynilad Water Services Inc., which won its case against the state over losses the company incurred from the delayed implementation of a tariff hike.

 

In a decision dated July 24, 2017, a three-member tribunal ordered the Philippine government to compensate Maynilad at least P3.4 billion for the losses suffered by Metro Manila's West Zone water concessionaire after the delayed implementation of its rebased water rates.

 

The amount to be indemnified by the government represents the fall in its rate of return from March 11, 2015 to Aug. 31, 2016.

 

The arbitration was conducted in Singapore subject to the 1976 rules of arbitration of the United Nations Commission on International Trade Law.

 

On Wednesday, Maynilad’s parent firm, Metro Pacific Investments Corp., told the Philippine Stock Exchange that the utility company has been notified about the government’s "application" with the High Court of Singapore seeking to "set aside the First Partial Award dated 24 July 2017."

 

DMCI Holdings, which holds a 25-percent interest in Maynilad, also made the same disclosure in a separate stock exchange filing.

 

"While it has yet to be served copies of the summons and the Setting Aside Application, Maynilad is confident that there are no valid and meritorious grounds to challenge or set aside the Arbitral Award," MPIC and DMCI said.

 

"The Republic’s latest efforts to frustrate and stonewall the enforcement of the Arbitral Award will fail," they also said, adding:

 

"Maynilad has already engaged Singapore counsel to ensure that the Republic’s baseless application is disposed of expeditiously."

 

In March 2015, Maynilad initiated arbitration proceedings against the government after the Metropolitan Waterworks and Sewerage System failed to act on the favorable award the company got for its 2013 to 2017 water tariff during end-2014.

 

Maynilad is the largest private water concessionaire in the country in terms of customer base. It serves the areas of Caloocan, Pasay, Parañaque, Las Piñas, Muntinlupa, Valenzuela, Navotas, Malabon, and certain portions of Manila, Quezon City, Makati and Cavite.