P134.5M is Reasonable Legal Fees for TransCo, PSALM in Singapore Arbitral Body – Manila Bulletin

The Audit Commission confirmed the decision of two state-owned companies engaged in energy management and distribution to spend US $ 2.69 million (approximately 134.5 million pesos) to hire foreign lawyers and locals, as well as expert witnesses, for legal representation in the arbitration proceeding initiated by the National Grid Corporation of the Philippines.

Transmit power

In a recent ruling, the COA-Commission Proper (COA-CP) granted the motion for reconsideration of the COA’s Legal Mandate Review (LRR) in a previous ruling which denied it as “extravagant and unnecessary »The hiring of two legal representations before the Singapore International Arbitration Center (SIAC).

The COA-CP is made up of President Michael Aguinaldo and Commissioner Roland Pondoc.

In granting the request for reconsideration, the COA-CP stated that the National Transmission Corporation (TransCo) and the Power Sector Assets and Liabilities Management Corporation (PSALM) may retain the services of the law firms Clifford Chance LLP and the Brattle Group for $ 990,000 and $ 600,000 for legal representation and as an expert witness, respectively, before SIAC.

In addition, Transco and PSALM were authorized to spend US $ 100,000 for the “provision of another expert witness on Philippine and international law”. Previously, after approval by the Government Business Legal Advisory Office (OGCC), the two state firms were allowed to be represented by Romulo, Mabanta, Buenaventura, Sayoc & Delos Angeles (Romulo Law Firm) for S $ 1 million .

“Given the large amount involved and the complexity of the arbitration case which required collaboration between two law firms and the participation of an expert witness, the Commission finds the commitment fees above reasonable, ”the COA-CP said, referring to the US total. $ 2.6 million in professional fees payable by TransCo and PSALM.

The arbitration case arises out of the NGCP’s petition seeking SIAC’s intercession in the controversy sparked by the concession agreement between the petitioner and TransCo in 2018.

NGCP has filed a claim against TransCo and PSALM demanding an arbitration award of more than 24 billion pesos and US $ 19,828,235.61 from government companies.

The Romulo law firm, which was hired as external counsel for the respondents, recommended hiring a lawyer and a foreign expert, as it noted that NGCP intended to engage the respondents. services of a foreign law firm and to present an expert witness.

In 2019, COA rejected the request to hire a foreign lawyer because it noted that it had already mandated the Romulo law firm for its legal representation. Thus, the state audit agency said the request was “unnecessary and extravagant.” In their petition for reconsideration, TransCo and PSALM explained that the Romulo law firm did not have the authority to represent them in local courts in Singapore.

“Hiring a foreign counsel is advantageous for PSALM and TransCO given their expertise and in-depth knowledge of Singapore law and case law, not to mention their authority to appear in local Singapore courts,” said the petitioners.

They also assured COA that there was no overlap in the scope of work of law firm Romulo and Clifford Chance LLP.

In upholding the appeal of TranCo and PSALM, the COA-CP noted that it rejected the previous justifications put forward by the two firms for deciding to hire a foreign counsel.

“Notwithstanding our observations against the initial justifications provided by PSALM and Transco, we recognize that their legal strategy may have changed and that they now find it more advantageous to hire a foreign counsel,” explained the audit body.

“This commission considers that the hiring of a lawyer and a foreign expert witness in accounting and economics is neither extravagant nor unreasonable”, declared the COA-CP.

He stressed: “As lead counsel, Romulo law firm has a duty to employ the best legal strategies to defend the cases of its clients.” “Regarding the hiring of an expert witness, the same can be seen as part of the legal strategies to strengthen the client’s case and increase the likelihood of obtaining a favorable decision,” stressed the jury made up of two members of the COA.



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