The Board of Investments (BOI) is planning to create a mediation body that will help resolve disputes between foreign companies and their local partners to avoid lengthy court cases.
According to the BOI, an agency attached to the Department of Trade and Industry (DTI), the body will serve as a court of first instance for partnerships between foreign and local companies threatened by disputes.
BOI governor Antonio Leviste said it is bad enough that foreign investments are coming in trickles. Those that do come in often end up in lawsuits with their local partners due to various disagreements over contracts, joint venture agreements and commitments.
"There must be a mechanism to prevent this from proliferating," said Leviste. "Otherwise, it could be a real disincentive for foreign investments."
Some of these cases end up with the Securities and Exchange Commission (SEC) as the quasi-judicial body that adjudicates intra-corporate disputes. The bulk, comprising mostly of cases of breach of contract, pile up at various regular courts where they normally take years to resolve.
At present, the BOI already mediating disputes between Francisco Motors Corp. and its foreign partner, Mazda Corp. of Japan and Transfarm and Co. which is still tied up in a dispute with Daewoo Motors of South Korea.
Also pending for resolution is the dispute between the Australian mining firm Arimco which has yet to settle its conflict with George Gonzales who owns the mining claim over 20,000 hectares of gold mine in Nueva Viscaya.
Leviste said it is not a good thing that there is no mechanism for the expeditious resolution of disputes involving BOI-registered firms.