CA gives PCSO time to explain botched P4.4-B deal with TMA Australia

The Court of Appeals has ordered the Makati City Regional Trial Court to give Aquino-appointed Philippine Charity Sweepstakes Office (PCSO) officials an opportunity to explain why they scrapped a P4.4-billion joint venture their predecessors entered into with an Australian firm. In a 16-page ruling promulgated Monday, the CA's Ninth Division said the PCSO officials should be given a chance to challenge the writ of preliminary injunction the Makati RTC Branch 59 issued in May to preserve the deal. “Wherefore, premises considered, this Court resolves to direct the public respondent to give petitioners PCSO, et al., a chance to seek relief to dissolve/quash the writ of preliminary injunction," according to the CA ruling written by Associate Justice Rosmari Carandang. Former PCSO officials and TMA Australia Pty Ltd. signed the P4.4-billion agreement during the administration of then President Gloria Macapagal-Arroyo to establish and operate the first thermal coating plant in the Philippines. But in August last year, new PCSO officials appointed by President Benigno Aquino III voided the deal to usher in a public bidding among suppliers of the project's paper requirements. TMA Australia then sought redress from the Makati RTC Branch 59, which issue a temporary restraining order (TRO) on April 13, 2011 to keep deal from being scrapped. A subsidiary of the TMA Group of Companies Limited, TMA Australia manufactures and sells tickets, tags, adhesive labels, and receipts on paper or film products. Named respondents to the case are incumbent PCSO chair Margie Juico, PCSO board members Ma. Aleta Tolentino, Mabel Mamba, Francisco Joaquin III, Betty Nantes, and general manager Jose Ferdinand Rojas II. Defective TRO corrected But the CA said the TRO was defective because the trial court has not yet acquired jurisdiction over the case since the summons were wrongly issued by the Makati court's process server which issued the summons, copies of the complaint and annexes to the Office of the Government Counsel (OGCC) — the principal law office of government-owned and -controlled corporations like the PCSO. The OGCC should represent the PCSO in legal proceedings, but the summons should be sent to the PCSO, the CA said. “Consequently, when the application for TRO was set for hearing on April 13, 2011, the trial court has not acquired valid jurisdiction over the persons of petitioners. Thus, the orders dated April 11 and 13, 2011 are null and void for lack of jurisdiction over the persons of defendants, herein petitioners," the CA ruled. However, the CA said the lack of jurisdiction was addressed when the Makati court issued new summons to the respondents. “The service of ‘alias summons’ upon petitioners is therefore valid and the trial court validly acquired jurisdiction over the persons of herein petitioners," the CA explained. Acquiring jurisdiction over the case, the Makati court then issued a writ of preliminary injunction against the PCSO officials even if the respondent officials have not yet participated in the case. The Court of Appeals then said the Makati court should reopen the proceedings to give PCSO officials the chance to defend their decision that nullified the deal with TMA Australia. — VS, GMA News