SBDMC wins Php 100 million civil case versus SBMA; Court of Appeals affirms the ruling

In an Order dated 31 January 2013, the Regional Trial Court (RTC) of Olongapo City, Branch 75, presided by Judge Raymond C. Viray, pursuant to a motion for summary judgment filed by Subic Bay Development and Management Corp. (SBDMC), declared that Subic Bay Metropolitan Authority (SBMA) has no legal basis to collect and demand payment for the disputed billings, and that SBDMC is not and cannot be held liable for SBMA’s supposed claim, now amounting to more or less Php 100,000,000.00.

The case stemmed from SBMA's continued and repeated attempts to collect from SBDMC differential billings for power consumption of locators within the SBDMC-managed industrial park inside the Subic Bay Freeport Zone (SBFZ) between 1998 and 2002. During that period, SBMA was managing and operating the power distribution system within the Freeport. SBDMC then filed a petition for declaratory relief in 2010.

According to the Court, “The role of SBDMC in the scheme of things is clear: It is the managing agent of SBMA with respect to the industrial park. In line with this conclusion, and in the absence of express agreement between SBDMC and SBMA with regard to power billing and collection of all locators within the industrial park, it is clear that Petitioner (SBDMC) merely acted as an agent of SBMA when it billed and collected power usage from locators…”

“SBDMC paid and SBMA received the amount collected from the locators. This role of Petitioner as mere collecting agent was further confirmed when SBMA took over the billing and collection directly theretofore performed by the petitioner. And since Petitioner is a mere collecting agent of Respondent (SBMA) with respect to power usage of the Locators within the SBGP (industrial park), there is no basis, in the absence of clear express agreement, for Respondent to charge and demand payment from Petitioner for disputed billings. To hold otherwise will violate the intent and agreements of the parties under the Joint Venture and companion agreements, which all contain “Entire Agreement” clause and which bar the introduction of ‘any rights, interests, understandings, agreements and obligations of the respective parties’ outside said agreements…” declared the Court.

Update: In a decision dated 30 January 2015, the Special Seventeenth (17th) Division of the Court of Appeals (CA G.R.-CV No. 100289) denied the appeal of the SBMA and affirmed in toto the assailed Order of RTC Branch 75 of Olongapo. 

(Disclosure: subiclawyer is handling the case for SBDMC)