SC orders Aussie firm to return P707M to PCSO

The SC also reversed and set aside the CA decision issued on February 4, 2016 and resolution dated June 27, 2016 affirming the orders issued by the Makati RTC in June and August 2014 which granted TMA’s motion for the garnishment of PCSO’s properties, assets and money to pay for the price of lotto paper deliveries in the amount of PHP82 million. (File Photo By Mike Gonzalez (TheCoffee) – Own work, CC BY-SA 3.0)

MANILA — The Supreme Court (SC) has ordered Australia-based firm TMA Australia PTY Ltd. and its local subsidiary TMA Group Philippines, Inc. (TMA) to return PHP707.2 million representing the assets of Philippine Charity Sweepstakes Office (PCSO) that were garnished by a court to pay for thermal papers and bets slips made by the former for lotto operations in the country.

The ruling renders the decision of the Makati City Regional Trial Court (RTC) on the case as “void and of no force and effect.”

In a 33-page decision dated August 28 by Associate Justice Andres Reyes Jr., the SC’s Third Division also set aside the March 27, 2014 decision of the Court of Appeals (CA) which upheld the May 13, 2011, September 4, 2013 and the November 6, 2013 orders of the Makati court preventing the PCSO from canceling the PHP4.4 billion Contractual Joint Venture Agreement (CJVA) it entered into with the Australian firm 10 years ago to put up a thermal coating plant in the country.

The PCSO revoked the agreement through a resolution issued on April 15, 2011 after the Office of the Government Corporate Counsel (OGCC) ruled that the agreement was essentially a supply contract, and is void for circumventing Republic Act 9184 or the Government Procurement Reform Act, particularly on bidding for government procurement supplies, and to evade the audit by the Commission on Audit (COA).

The SC also reversed and set aside the CA decision issued on February 4, 2016 and resolution dated June 27, 2016 affirming the orders issued by the Makati RTC in June and August 2014 which granted TMA’s motion for the garnishment of PCSO’s properties, assets and money to pay for the price of lotto paper deliveries in the amount of PHP82 million.

The Court explained that the injunctive writs appeared to have been issued by the trial court despite the absence of facts that would justify its issuance.

“In this case, TMA invoked and premised its purported rights solely on the basis of the CJVA that it had earlier executed with PCSO, and the trial court took such proposition hook, line and sinker, as the RTC found it necessary to protect such rights by the continued implementation of the contract between the parties,” the SC said.

“If only the trial court made a closer look into the terms of the contract as against the parties’ respective assertions, it would have readily determined the reasonable reservations on the validity of the CJVA, and that the claimed rights of TMA were far from being “clear and unmistakable,” it added.

The SC said it is the PCSO that stood to sustain substantial and irreparable damaged by the continued implementation of the CJVA while the main suit is pending and cited the “the adverse and substantial impact that its terms could produce on the funds of the agency, as well as the damage, breach and corresponding liabilities that might result from the failure to observe procurement rules in case CJVA’s illegality is confirmed.”