Supreme Court favors Platinum over Oriental Peninsula

MANILA, Philippines – The Supreme Court has ruled in favor of Platinum Group Metals Corp. in all four cases involving PGMC and Oriental Peninsula Resources Group on the issue of who owns the right to mine nickel deposits in Narra and Sofronio Española, Palawan.

Oriental, which is listed in the Philippine Stock Exchange (PSE), is the successor in interest of Citinickel Mines and Development Corp.

In a disclosure to the PSE, Oriental said it has received the consolidated decisions of the second division of the Supreme Court.

Reacting to the SC ruling PGMC chairman, Ramon R. Atayde, said, “ PGMC would now like to put the case and finally move forward.”

PGMC had an operating agreement with Olympic Mines and Development Corp. which had lease contracts from the Philippine government to operate two nickel mine sites in Palawan.

Olympic unilaterally cancelled the operating agreement for alleged gross violations of their contract and transferred its application for mining agreement, including its rights, to Oriental’s subsidiary Citinickel Mines and Development Corp. via a deed of assignment.

Court cases were filed by PGMC and Oriental against each other.

While the cases were pending, PGMC continued to occupy and control the mine site although it had stopped operations while Oriental-Citinickel was barred from entering the site.

In the first case, Olympic had asked the Palawan court to stop PGMC from mining the site due to the alleged gross violations and also to recover possession of the mine.

The Palawan lower court, however, dismissed the case after finding that PGMC had been complying with the terms of the agreement and that Olympic’s unilateral termination of the operating agreement was legally impermissible.

The Palawan lower court’s decision has been upheld by the SC in the consolidated decision, which states that “quite obviously, the operating agreement is not a contract between the government and a contractor, instead, it is a purely civil contract between two private entities – one of whom happens to be a party to a mineral agreement with the government.”

Thus, the SC said, it is the trial court which has the sole and exclusive authority to resolve the issue and not any administrative agency.

With the SC upholding the decision of the Palawan lower court in ruling that PGMC had not violated its contract with Olympic, the other three cases stemming from the dispute were also ruled in favor or PGMC.