CA: Pay P2.3B or no MRT ads

The DoTC stopped issuing access or work permits to the MRTDC, its advertisers and lessees, barring their entry in the MRT 3 system in early 2013.

The Court of Appeals (CA) ordered to stop the MRT Development Corporation (MRTDC) from using its advertising and commercial leasing rights while development rights payment (DRP) obligations to the government amounting to P2.3 billion is pending.

The 9 July resolution was penned by Associate Justice Pablito Reyes and concurred by Associate Justices Ramon Bato Jr. and Ramon Cruz of the CA 11th Division, affirming its 5 March decision after the MRTDC failed to raise new arguments in order for its motion to be granted.

The CA lifted the writ of preliminary injunction issued by the Pasig Regional Trial Court (RTC) as an interim measure of protection (IMP) on the matter on 5 March.

It cited Rule 5.2 of the Special Alternative Dispute Resolution Rules that a petition for IMP may properly be issued before arbitration commences.

The injunction ordered the Department of Transportation (formerly Department of Transportation and Communications) to issue the necessary access or work permits to the MRTDC to allow it to fully exercise rights over MRT 3 pending arbitration.

It claimed that from 2001 to 2004, the MRTDC paid according to the agreed DRP schedule under their build-lease-transfer (BLT) agreement covering the construction and operation of MRT 3.

On 21 July 2004, the MRTDC ceased paying the DRP despite repeated demands by the DoTC.

The DoTC stopped issuing access or work permits to the MRTDC, its advertisers and lessees, barring their entry in the MRT 3 system in early 2013.

The Commission on Audit called on the DoTC for an Audit Observation Memorandum, noting the unpaid P981,354,501 due as DRP from the MRTDC since 2004.

A final demand was made by DoTC on MRTDC for payment of the outstanding DRP obligations in the accumulated amount of P2,298,788,929.52.

The department warned of termination of the BLT Agreement, even as it expressed willingness to commence arbitration as mandated under the BLT Agreement.