THE Supreme Court has junked the bid of Pangilinan-led Philippine Long Distance Telephone Company (PLDT) to block Globe and Bayan Telecommunications Inc.’s (Bayantel) joint application for regulatory approval filed before the National Telecommunications Commission (NTC).
In a six-page resolution released on Tuesday, the Court’s First Division held that the petition for review filed by PLDT, seeking the reversal of the Court of Appeals’ 2015 decision affirming the validity of the orders issued on November 27, 2013, December 13, 2013 and July 3, 2014 by the respondent NTC, is already moot and academic.
The NTC orders allowed the continuation of the proceedings before the NTC in connection with Globe and Bayantel’s joint application for regulatory approval, and denied the PLDT’s motion to dismiss or suspend the same.
The Court explained that the petition for review has become moot and academic with the approval of Globe and Bayantel’s Joint Application by the NTC last July 2, 2015.
“In this case, while the certiorari petition filed by PLDT questioning the interlocutory orders issued by the NTC was pending, the NTC rendered a decision on the Joint Application … Given this development, any action on the certiorari petition on mere incidental matters of the Joint Application would not accord any practical relief to PLDT,” the resolution read.
Globe and Bayantel had sought the denial of PLDT’s petition for review on the ground that it has become moot and academic because of the issuance of the NTC decision on July 2, 2015 approving the Joint Application.
They noted that PLDT has already resorted to the filing of a motion for reconsideration before the NTC, seeking to set aside its July 2, 2015 resolution.
PLDT, however, insisted that the petition has not been mooted by the approval of the Joint Application, considering that such decision is not yet final and executory. It also insisted that the case is an exception to the rule on mootness.
However, the SC maintained that the case has already become moot and academic and that PLDT’s remedy is to file an appeal questioning the NTC decision in the Joint Application and not to insist on the petition for review on certiorari involving interlocutory orders earlier issued by the NTC.
In questioning Globe and Bayantel’s Joint Application, PLDT claimed that the NTC violated its own rules and its right to due process when it did not order the joint applicants to append the amended rehabilitation plan (ARP) and the master restructuring agreement (MRA) to the joint application.
The PLDT also argued that the joint application seeks the transfer of Bayantel’s franchise to Globe, thus, prior congressional approval is needed. And, by holding in abeyance the resolution of the issue of whether or not prior legislative approval is required to entertain the join application, the NTC appropriated unto itself powers that are inherent in Congress and which were not delegated.
PLDT stressed that the NTC violated its own rules, the notarial rules, rules of court and other applicable jurisprudence by acting on the joint application to the prejudice of the rights of PLDT and other interested parties.
The CA noted, however, that the ARP and MRA were furnished to the NTC during its course of proceedings; thus, the issue raised by PLDT on the matter is moot and academic.
Likewise, the appellate court held that the NTC did not commit grave abuse of discretion in deferring resolution of the issue on whether or not prior congressional approval is needed before the NTC can proceed to hear the joint application of Globe and Bayantel.
The CA pointed out that such assertion requires proof that an actual transfer of franchise will happen between the two firms.
Records showed that on October 11, 2013, Globe and Bayantel filed before NTC a joint application for the approval of the debt-to-equity transaction between the two companies.
The case arose after the rehabilitation court approved Bayantel’s ARP and MRA which allowed its creditors the option to convert their restructured debt in the total amount of $114 million into additional equity.
As the principal creditor, Globe Telecom agreed to convert its exposure into 56.6 percent of Bayantel’s outstanding shares.
However, Section 20 (h) of Commonwealth Act 146 of the Public Service Act requires that before a transfer of more than 40 percent of a grantee’s subscribed capital stock can be effected, the grantee and the transferee must obtain the approval or authorization of NTC; otherwise, the transfer shall be deemed null and void.
To recall, Globe acquired 98.26 percent of Bayantel’s loans and 100 percent of Radio Communications of the Philippines Inc’s (RCPI) liabilities.
RCPI is a unit of Bayantel, and both are owned by the Lopez Group.
The acquisition cost $130 million, lower than the $400-million face value of Bayan’s aggregate debt.
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