CA upholds lower court decision favoring thermal paper supplier

The Court of Appeals. FILE PHOTO

MANILA, Philippines—The Court of Appeals upheld the decision of the Makati Regional Trial Court favoring the Australian firm TMA Group of companies over the Philippine Charity Sweepstakes Office (PCSO) in connection with a 25 year joint venture agreement for the supply of thermal paper to all lotto outlets in the country signed in 2009.

In a 15-page decision, the appeals court’s 11th Division through Associate Justice Vicente Veloso said the lower court did not commit an error in issuing the status quo because its “intention was to avoid any irreparable injury that a non-issuance of the injunctive writ may cause TMA.”

PCSO Board chaired by Margarita Juico revoked the JVA saying it was “disadvantageous to the government.”

The Australian firm then questioned the revocation saying it was aboveboard and went through the process.

Makati RTC Branch 59 Judge Winlove Dumayas, issued a writ of preliminary injunction and the writ of prohibitory injunction and directed PCSO chairman Margarita Juico and the PCSO board members to immediately lift the suspension and implementation of the JVA and resume its implementation without delay.

The court also ordered the PCSO officials to cease and desist from performing acts that would lead to the cancellation of the JVA or that would nullify its implementation.

In 2009, TMA and the then PCSO board signed a 25-year JVA for the supply of thermal paper.

Subsequently, the TMA relocated its thermal manufacturing plant in the Philippines from China investing $400 million to the country.

It 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 while other local suppliers have to import thermal papers being utilized by government agencies, airlines and other private firms.

The appeals court said the JVA was signed on Dec. 4, 2009. TMA is required to immediately begin the creation of a plant capable of producing thermal—coated paper.

The appeals court added that the JVA was thoroughly studied not only by the PCSO but by the Government Corporate Counsel.

“If we are to allow PCSO, et al. to suspend the CJVA without TMA’s consent, and worse, without due process, the same would work injustice to the latter as it would be violative of its right under the CJVA. Its causing TMA irreparable injury, as a protected party under the contract, is evidently beyond dispute,” the appeals court said.