Supreme Court allows PSALM to pay lawyers advising on privatization – BusinessWorld Online

THE Supreme Court has overturned a ruling by the Commission on Audit (CoA), paving the way for the Power Sector Assets and Liabilities Management Corp. (PSALM) to pay lawyers who had advised on privatization projects.

In a 31-page decision on Nov. 21 and made public on June 17, the High Court found that CoA had abused its discretion by blocking PSALM’s legal fees after three years.

“CoA has not admitted its fault, much less, provided any real and justifiable reason why after making PSALM wait after over three years, it denied PSALM’s request for concurrence,” according to the ruling, written by Associate Justice Amy C. Lazaro-Javier.

The court ordered the commission to allow payment to the lawyers for services rendered.

It also ruled that the PSALM officers who approved the engagement of lawyers are not liable for the payment of professional fees.

PSALM had hired lawyers to advise on Independent Power Producer contracts of the National Power Corp., the auction of energy generation projects, and other transactions.

The court added that the advisors had rendered satisfactory service under the contract entered into with PSALM for the benefit of the government.

CoA rules require the commission to evaluate a request for concurrence on a retainer contract engaging private lawyers within 60 days.

PSALM had asked CoA to act on the request for concurrence on or before May 30, 2011.  The commission denied the company’s request on Nov. 6, 2014, more than three years since receipt.

“CoA’s unjustified refusal and delay to perform its obligation to review, evaluate, and render its concurrence prevented PSALM from securing the required concurrence,” the court noted. “Thus, there was no fault on the part of PSALM as the fault lies with CoA.”

The tribunal added that CoA’s inaction to the request represented  “evasion of positive duty” and “virtual refusal to discharge a duty enjoined by law.” — John Victor D. Ordoñez