Singapore tribunal rules NGCP’s prepayment valid, dismisses major claims

The National Grid Corporation of the Philippines (NGCP) won a legal battle against the National Transmission Corporation (TransCo) and the Power Sector Assets and Liabilities Management Corporation (Psalm) after a Singapore arbitral tribunal upheld its position on key financial and operational issues.

In a regulatory filing, Synergy Grid & Development Phils., Inc. shared that the Singapore International Arbitration Centre (SIAC) ruled that NGCP did not violate nationality restrictions under the Philippine Constitution or the Anti-Dummy Law. 

It also rejected TransCo and Psalm’s claim that NGCP’s prepayment of Php 57.88 billion in July 2013 was invalid.

In its final award dated February 19, 2025, The tribunal upheld that NGCP rightfully exercised its prepayment option as there were no outstanding arrears under its concession agreement. It further stated that Psalm had accepted the prepayment as valid, effectively waiving any objections to its legitimacy.

Moreover, the ruling affirmed that NGCP did not breach its obligations related to permitted indebtedness or insurance under its concession agreement.

Meanwhile, on the financial claims, TransCo sought Php 3.9 billion in outstanding obligations from NGCP, but the tribunal only awarded Php 372.77 million, covering specific charges such as connection fees and accrued revenues. NGCP was also ordered to pay 6% annual interest on these amounts until full payment.

The ruling also reduced NGCP’s concession fee by adjusting the valuation of projects under construction. The tribunal upheld NGCP’s preferred exchange rate of 1 USD to 49.6 PHP, instead of the 1 USD to 52.67 PHP rate argued by TransCo and Psalm.

Psalm and TransCo were ordered to reimburse NGCP Php 56.53 million for right-of-way expenses, plus 6% annual interest, and an additional Php 51.84 million for retained obligations.

The decision reaffirmed NGCP’s exclusive rights over the national power grid, including authority over the transmission development plan (TDP) without TransCo’s approval. The ruling also recognized NGCP’s right to use transmission assets for telecommunications, barring TransCo from interfering in this aspect of its operations.

Under the UNCITRAL rules governing the arbitration, the ruling is final and binding, requiring all parties to comply without delay.

The tribunal’s decision reinforces NGCP’s legal standing as the country’s sole power grid operator, settling key financial and operational disputes with the government agencies.