THE Court of Appeals (CA) has denied the plea of Philippine Gaming Management Corp. (PGMC) to reverse its decision affirming the right of an Australian firm to pursue its 50-year joint venture contract with the Philippine Charity Sweepstakes Office (PCSO) for the supply of thermal paper to all lotto outlets in the country.
In a two-page decision penned by Associate Justice Priscilla Baltazar-Padilla, the CA’s Special 14th Division said PGMC failed to offer new arguments that would warrant the setting aside of its decision issued on September 17, 2018.
In that September ruling, the appellate court denied the PGMC’s petition seeking to nullify the writ of preliminary injunction that the Regional Trial Court in Makati City issued in favor of TMA Australia PTY Ltd. and its local subsidiary TMA Group Philippines Inc. (TMA).
The injunction stopped PGMC from performing any act which would violate or render ineffective TMA’s right under the Contractual Joint Venture Agreement (CJVA) it entered into with PCSO on December 4, 2009.
“A perusal of the said motion reveals that no new, valid and cogent reason was forwarded by the movant to convince this Court to amend, much less, reverse its aforesaid decision. The arguments embodied therein are mere rehash of those earlier pleaded which have already been amply passed upon by this Court,” the CA said in denying the motion for reconsideration filed by PGMC.
Court records showed that following the signing of the agreement, the TMA spent $400 million to relocate its thermal manufacturing plant in the Philippines from China.
TMA is the only thermal paper plant set up in the country using high-tech machinery in the production of thermal paper and other paper products. Other local suppliers have to import thermal paper being utilized by government agencies, airlines and other private firms.
However, PCSO revoked the agreement through a resolution issued on April 15, 2011, after the Office of the Government Corporate Counsel (OGCC) found that the agreement was essentially a supply contract, which is void for being a ploy to circumvent Republic Act 9184, or the Government Procurement Reform Act, particularly on bidding for government procurement supplies and to evade audit by the Commission on Audit (COA).
This prompted the TMA to seek relief from the trial court which issued a writ of preliminary injunction against PCSO’s revocation order of the CJVA on May 6, 2011.
Subsequently, TMA informed PGMC of the existence of its agreement with PCSO and the pending civil case for specific performance as well the writ of preliminary injunction issued by the trial court.
Despite this, PGMC entered into an interim agreement with PCSO where the latter would source its thermal paper and ticket requirements from the former, thus, affecting TMA’s exclusive rights under the agreement.
This prompted TMA to file another complaint, this time for tortious interference and injunction against PGMC.
In an order issued on October 18, 2017, the trial court granted TMA’s application for preliminary injunction, enjoining PGMC from entering into an interim agreement with PCSO in the supply of thermal paper.
The PGMC elevated the case before the CA, which ruled in favor of TMA. The appellate court held that TMA has a “clear and unmistakable” right to be protected which warranted the issuance of a writ of preliminary injunction by the lower court.