The Singapore International Arbitration Center’s recent ruling in favor of the National Grid Corporation of the Philippines (NGCP) has cleared all questions regarding the legality of its corporate structure and concession agreement, NGCP said.
“So, it’s a vindication that we were just following laws under the contract served by the government when they privatized the transmission services and NGCP was given the concession,” Cynthia Alabanza, NGCP spokesperson, told reporters on the sidelines of a corporate event in San Juan City on Wednesday.
The Singapore arbitral court said NGCP did not breach nationality restrictions under the Philippine Constitution and the Anti-Dummy Law, among other orders included in its final ruling on February 19, 2025.
“… The concession agreement and how we’ve been implementing it in large part, will remain the same,” Alabamian said.
“We were vindicated, meaning, what we are doing, which we have been saying always, is based on the concession agreement. The arbitral court proved that what NGCP is doing is right in large part,” she added.
The ruling will not affect much of National Grid’s operations for now, other than clearing all questions on the way it runs the country’s power transmission system.
Alabanza, however, said since the ruling was awarded only last week, the monetary claims involved in the suit are still being straightened out.
Last month, the Maharlika Investment Corp. (MIC), which manages the country’s sovereign wealth fund, acquired a 20 percent share in NGCP via a binding agreement with Synergy Grid and Development Philippines Inc.
Synergy Grid holds a 40.20 percent equity equivalent to four board seats in NGCP.
Under the agreement, the sovereign wealth fund will subscribe to preferred shares offered by Synergy Grid. This would grant the MIC two board seats each at Synergy Grid and NGCP.
Before the deal between MIC and Synergy Grid, NGCP was 40 percent owned by the State Grid Corporation of China, while the remaining 60 percent was owned by a group of Filipino businessmen led by Henry Sy Jr.’s Monte Oro Grid Resources Corp., and Robert Coyiuto Jr.’s Calaca High Power Corp.
NGCP is yet to update its new ownership structure with MIC having two board seats in the company.
On Feb 14, 2018, NGCP sought an arbitration ruling before the Singapore Arbitration court against the government’s Power Sector Assets and Liabilities Management Corp. (PSALM) and the National Transmission Corp. (TransCo).
The case was filed in relation to the implementation and interpretation of the concession agreement between NGCP and PSALM and TransCo.
National Grid asked the Singapore court to declare the pre-payment made on July 15, 2013 amounting to P57.88 billion as valid, as well as the payment of other monetary claims of about P4 billion, which should have been borne by TransCo under the concession agreement.
PSALM and TransCo, in turn, asked the court to declare NGCP in default of the agreement for having violated the nationality restrictions applicable to public utilities under Philippine laws.
PSALM and TransCo disputed NGCP’s monetary claims and sought counterclaims of P2.7 billion as part of TransCo’s excluded receivables, plus interest.
The Singapore court said that since NGCP was found to have not breached the nationality restrictions, it invalidated PSALM and TransCo’s defense that such claims could make National Grid’s prepayment and its other claims inadmissible or unenforceable.
It declared NGCP validly exercised its right to make the prepayment of P57.88 billion on July 15, 2013.
TransCo’s claim of outstanding obligations in the amount of around P3.9 billion was adjusted by the court to a total amount of P372.77 million, saying that NGCP shall pay TransCo sums actually incurred in the settlement of right-of-way claims but not its operating expenses in its sub-transmission assets disposal department.
With respect to projects under construction, the agreed difference of P13.1206 billion which, after accounting for escrow funds, is now at P10.1065 billion. The amount will now be converted to US dollars at a rate of $1:P49.6 for the requisite concession fee adjustment.
The court ordered PSALM and TransCo to indemnify NGCP up to the amount of P56.53 million for expenses on right-of-way claims, together with a 6 percent interest per year until the full amount is covered.
However, the ruling emphasized that titles to any documented property rights acquired by NGCP in the exercise of its power of eminent domain shall be registered in the name of TransCo.
