SC issues TRO vs lower court ruling that stopped expropriation of Peco assets

ILOILO CITY—The Supreme Court has stopped the enforcement of a lower court decision that would have prevented the takeover by a new power distribution firm of assets and facilities of Panay Electric Co. (Peco) under a new franchise.

In an en banc resolution issued on Dec. 3, the high court issued a temporary restraining order (TRO) to stop enforcement of a July 1 order of the Mandaluyong City Regional Trial Court (RTC) that ruled as unconstitutional a provision in the franchise law given new power distribution firm More Power Electric Corp. (More Power) that allowed the expropriation of assets, equipment and facilities of Peco.

The Mandaluyong RTC ruling declared as void and unconstitutional Section 10 (right of eminent domain) and Section 17 (transition of operations) of Republic Act (RA) No. 11212, the franchise given to More Power, for purportedly infringing on Peco’s rights to due process and equal protection of the law.

The RTC ruling also made permanent the TRO it issued on March 14 against the expropriation of Peco assets.

The Supreme Court said in its resolution that the TRO against the RTC ruling will remain in effect until further orders of the high court.

Peco has been invoking the Mandaluyong RTC ruling to stop proceedings on the expropriation case filed by More Power against Peco’s distribution assets.

More Power, owned by ports magnate Enrique Razon Jr., is seeking to expropriate Peco’s distribution assets, which had been valued at P489 million, based on RA No. 11212 which granted More Power a 25-year franchise to distribute electricity in Iloilo City.

Peco’s franchise expired on Jan. 18 but the Energy Regulatory Commission (ERC) has granted a provisional Certificate of Public Convenience and Necessity to Peco to continue distributing power in Iloilo City for a limited period.

The ERC move was aimed at preventing any disruption of power supply amid the continuing legal dispute between the rival firms.

Under RA No. 11212 signed by President Rodrigo Duterte last Feb. 14, More Power has two years to acquire or put up its own distribution system.

The Iloilo RTC Branch 37 earlier granted the issuance of the writ of possession to More Power. The case is now before the RTC Branch 35 presided over by Judge Daniel Antonio Gerardo Amular.

But Amular, in a three-page order dated Nov. 18, suspended proceedings on the expropriation case pending the resolution of the related case at the Supreme Court.

Amular said he directed the suspension of the proceedings “in the interest of judicial fairness, respect to the honorable Supreme Court and for practical considerations.”

The judge said in his order that the case is “extraordinary” noting that it not only involved procedural rules but also RA No. 11212.

Amular, however, denied the motion filed by More Power for him to recuse himself from the case for “lack of factual basis.”

Edited by TSB