Mandaluyong court voids provisions in newly-enacted franchise of More

The Mandaluyong City Regional Trial Court Branch 209 ruled in favor of Panay Electric Co. by declaring certain provisions of the franchise of More Electric and Power Corp. as “void and unconstitutional for infringing on Peco’s rights to due process and equal protection of the law.”

The Mandaluyong RTC, in a decision signed by Judge Monique Quisumbing-Ignacio, also made permanent the TRO issued against More.

More president Roel Castro said the company was looking at its own legal options following the decision of the Mandaluyong court.

“The temporary restraining order dated 14 March 2019 in so far as it enjoins respondent More and/or any of its representatives from enforcing any of the rights and obligations set forth under RA 11212, including but not limited to commencing or pursuing the expropriation proceedings against petitioner More under the assailed provisions and takeover by respondent More of petitioner Peco’s distribution assets in the franchise area is hereby made permanent,” the court said.

RA 11212 signed by President Rodrigo Duterte in February this year granted More a 25-year power distribution franchise in Iloilo City. Peco’s franchise expired on Jan. 19 but it was granted a provisional certificate of public convenience and necessity by the Energy Regulatory Commission to ensure uninterrupted supply of electricity in Iloilo City. 

“Wherefore, premises considered, judgment is hereby rendered declaring Sections 10 and 17 RA No. 1121 void and unconstitutional for infringing on Peco’s rights to due process and equal protection of the law,” the court said.

The assailed provisions of RA 11212  gave More the power to take over the entire distribution utility used by PECO for the operation of its distribution system.

The court said Peco has no obligation to sell and the respondent More has no right to expropriate Peco’s assets under Sections 10 and 17 of RA 11212 and Pecos’s rights to its properties “are protected against arbitrary and confiscatory taking.”

Section 10 of RA 11212 authorizes More to exercise the power of eminent domain and acquire such private property as necessary for the realization of the purposes for which the franchise is granted.  Section 17 reiterates the power of More as the grantee.

“The only tangible effect of the exercise of eminent domain by virtue of the assailed provisions would be to replace Peco with More as the owner of the existing electric power distribution system. In other words, a corporate takeover. To achieve this end, the State should not intervene. This should be a private matter between Peco and More,” the Mandaluyong RTC said.

“What the court is discussing as unconstitutional, lest it be misunderstood, is the transfer of all of Peco’s distribution assets existing at the franchise area by virtue of the exercise of eminent domain as provided for in the assailed provisions,” it said.

Topics: Mandaluyong City Regional Trial Court , Panay Electric Co. , Peco , More Electric and Power Corp.
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