The Singapore International Arbitration Center rendered a final ruling in favor of the National Grid Corporation of the Philippines (NGCP), saying National Grid did not breach the nationality restrictions under the Philippine Constitution and the Anti-Dummy Law.
Synergy Grid and Development Philippines Inc. on Monday said the Arbitral Tribunal awarded its final ruling on Feb. 19, 2025.
Synergy Grid holds a 40.20 percent equity equivalent four board seats in National Grid.
Last month, the Maharlika Investment Corp., which manages the country’s sovereign wealth fund, acquired a 20 percent share in NGCP via a binding agreement with Synergy Grid.
Under the agreement, MIC will subscribe to preferred shares offered by Synergy Grid. This would grant the sovereign wealth fund two board seats each at Synergy Grid and NGCP.
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 arbitration 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, and the payment of other monetary claims of approximately P4 billion which should have been borne by TransCo under the concession agreement.
PSALM and TransCo also 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 can make National Grid’s prepayment and its other claims inadmissible or unenforceable.
The court declared that NGCP did not breach its obligations under the agreement in relation to permitted indebtedness or insurance.
It declared NGCP validly exercised its right to make the prepayment of P57.88 billion on July 15, 2013.
“Furthermore and in any event, PSALM accepted the prepayment as valid and accordingly waived any right that PSALM and TransCo may have had to object to the validity of the prepayment, such that they were deemed to have accepted it as fully compliant with the requirements of the concession agreement,” the court said in the ruling.
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.
“During the concession period, TransCo may not interfere with NGCP’s exclusive right by carrying on, or purporting to possess the right to carry on any such business,” the ruling read.
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.
