CA stops release of Stradcom funds
MANILA, Philippines—The Court of Appeals stopped the release of over P3 billion funds of Stradcom Corporation held in escrow at the Land Bank of the Philippines.
In a resolution promulgated Sept. 27, the appeals court sixth division said they believe that there is extreme urgency to protect Stradcom represented by petitioner Bonifacio Sumbilla “from suffering grave injustice and injury, and is furthermore compelled to grant the TRO [temporary restraining order] to preserve the status quo binding the parties in this case.”
The 60-day TRO enjoins the Land Transportation Office, Land Bank and Stradcom represented by Cezar Quiambao from implementing the Quezon City Regional Trial Court Branch 90 dated Aug. 5, 2013 denying a motion to stop the release of the escrowed fund without court approval.
Sumbilla, in his petition to the appeals court, said the lower court “abandoned its judicial duty” to implement the final and executor ruling of the Supreme Court.
The high court, in its Aug. 23, 2011 ruling, said the dispute between Quiambao and Submilla’s group should be resolved in an interpleader case and the funds will remain in escrow while the issue is being resolved.
The high court also ordered the transfer of the interpleader case from Quezon City Regional Trial Court Branch 222 to a special commercial court.
But Sumbilla said that while the fund is in escrow, the government, through Transportation and Communications Secretary Joseph Emilio Abaya, allegedly acting upon the approval of Executive Secretary Paquito Ochoa, managed to convince the Land Transportation Office (LTO through Virginia Torres) to have the Land Bank of the Philippines to release P1 billion from the escrowed fund to pay for Stradcom’s liabilities to the Bureau of Internal Revenue (BIR), other banks and creditors.
“It is disturbing that even with the standing order for the LTO to deposit the escrowed billions, still a large chunk of this reserved amount was readily and easily released, and worse, as alleged by petitioner (Sumbilla), did not redound to the benefit of Stradcom,” the appeals court said adding that if no TRO is issued, the remaining funds could also be prematurely disbursed.
Stradcom was the IT service provider of the LTO through build-own-operate agreement.
The appeals court also ordered Sumbilla to post a P5-million bond to answer for whatever damages Stradcom, represented by Quiambao, may incur in relation to the TRO.
Concurring with the ruling were Associate Justices Hakim Abdulwahid and Edwin Sorongon.
