PUBLICLY listed firm DFNN Inc. is seeking a change in the amount of liquidated damages to be paid by the Philippine Charity Sweepstakes Office (PCSO) for terminating its equipment lease agreement (ELA).
In the Petition of Correction of Arbitral Award filed by the company last week with the Regional Trial Court in Makati City, the Tribunal should have computed the damages at P310,095,149.70.
As per the result of its arbitral ruling on May 21, the ad hoc arbitration panel ordered the PCSO to pay DFNN P27 million for improperly rescinding its ELA on systems-design development and upgrade for lotto betting via personal communication devices through text, GPRS, bluetooth, 3G, Wi-Fi protocols and other wireless tools.
According to DFNN President and CEO Ramon C. Garcia Jr., their board of directors has assessed and evaluated over the last few weeks the possible legal solutions to make sure that maximum restitution is effected with regard to the previous ruling.
“This Petition for Correction of Arbitral Award is a step closer to securing and protecting the interests of our shareholders,” he said.
DFNN’s petition argues that under Rule 11.4, in relation to Rule 11.4(B)(a) of the Special ADR Rules, the Court may correct/modify the arbitral award or order the Tribunal to do it so if there was an evident miscalculation of figures or mistake in the description of any person, thing or property referred to in the award. It also asserted that the computation of liquidated damages is governed by Section 13.2 (i), which says that, “PCSO, if it is the party in default, shall pay DFNN liquidated damages in the amount equal to the market value of the system…inclusive of a penalty charge of 2 percent per month on the amount due computed from the date of termination or cancellation of the agreement to the actual date of payment.”
In consideration of this provision, a total of 122 months and seven days have passed when the countdown started from the illegal termination of the ELA by virtue of respondent’s Board Resolution 080, Series of 2005, on April 5, 2005, until the rendition of the award on May 21, 2015.
Hence, the liquidated damages should have been over P310 million and not P27 million, as originally ordered by the court.
Amid the legal suits that might have strained the relationship between parties, Garcia previously said that DFNN is still willing to work with the present PCSO management, led by its new chairman, Ayong Maliksi.
“We strongly believe in the mission of the PCSO to raise funds for charity, and would like to reiterate our commitment to partner with the PCSO in the critical task of nation-building and ensuring that no single Filipino gets left behind,” he said.