The Court of Appeals affirmed the writ of preliminary injunction filed by SMC Global Power Holdings Corp. against Power Sector Assets and Liabilities Management Corp. on the 1,200-megawatt Ilijan natural gas power plant in Batangas province.
SMC Global said in a disclosure to Philippine Dealing & Exchange Corp. the appellate court denied PSALM’s appeal and affirmed the earlier orders issued by the Regional Trial Court of Mandaluyong City.
The CA affirmed the lower court’s order granting the issuance of a writ of preliminary injunction against PSALM and naming Manila Electric Co. as intervenor in the case.
PSALM last year elevated its case against San Miguel Corp.’s power unit to the Court of Appeals seeking the termination of the independent power producer administrator contract on the Ilijan natural gas power plant.
South Premiere trades the contracted capacity of the Ilijan natural gas plant in Batangas after posting the highest bid of $870 million in 2010.
The dispute arose from the interpretations of certain provisions related to generation payments under the Ilijan IPPA agreement.
PSALM advised South Premiere on Sept. 4, 2015 that it was terminating the Ilijan IPPA agreement because of the latter’s alleged failure to settle outstanding generation payments.
The agency earlier alleged that South Premiere’s outstanding obligations had reached over P12 billion as of July 2016.
PSALM earlier said it strictly followed the computations based on the IPPA agreement and maintained that its rightful claims were valid and not erroneous.
PSALM said South Premiere’s computation of payments “unilaterally and erroneously applied prices which were inconsistent” with the Ilijan IPPA agreement.
South Premiere filed a complaint before the court on Sept. 7, 2015 seeking to nullify the termination notice of PSALM and the drawing of the standby letter of credit.
PSALM called on the performance bond in the form of a stand-by letter of credit of South Premiere with ANZ Bank in the amount of $50 million.
The Mandaluyong City regional trial court issued a preliminary injunction in favor of South Premiere last year, stopping the government from further proceeding with the termination the IPPA contract for the Ilijan natural gas power plant.
San Miguel has said that it filed a case against PSALM “to seek justice from the court, clear the confusion and set the facts straight” on the claims of the government.
“We have been diligently paying PSALM what is due us. We do not owe PSALM a single centavo. SPPC has fully paid all its obligations under its Independent Power Producer Administration Agreement with government,” San Miguel said.
SPPC has paid PSALM a total of $4.8 billion in various fees as of October as administrator of the Ilijan power plant.