Cebu court restrains Aboitiz partner

MANILA, Philippines - A Cebu City court has issued a temporary restraining order against Pacific Hydro Bakun Inc. (PHBI), the joint venture partner of Aboitiz-owned Philippine Hydropower Corp. (PHC) in Luzon Hydro Corp. (LHC), in connection with PHC’s complaint for “tortious interference in contractual relations and exercise of property rights.”

PHC is the investment holding company of the Aboitiz Group in hydro power generation.

“The TRO was granted by the court to stop PHBI, PHC’s joint venture partner in LHC from inducing any party from breaching its contract with Philippine Hydropower; further intimidating, threatening, coercing, or compelling PHC and its directors in LHC; preventing LHC and/or its affiliates from engaging in lawful business ventures without the participation and involvement of PHBI and Pacific Hydro Ltd (parent company),” Aboitiz Power Corp. (APC) said in a statement to the Philippine Stock Exchange.

LHC is the special purpose vehicle formed to develop, construct and operate the 70-megawatt Bakun hydropower plant in Ilocos Sur under a build-operate-transfer scheme with the National Power Corp.

APC said the TRO prevented PHBI from committing other acts of harassment against PHC and its directors in LHC relating to PHC’s directors’ refusal to participate in the bidding.

PHC earlier filed the complaint with the Cebu City Regional Trial Court against PHBI for allegedly forcing the directors to bid for the contracted capacities of three hydro plants.

PHBI wanted PHC officials to vote in favor of allowing the joint venture company to participate in the bidding for the independent power producer administration (IPPA) for the combined contracted capacities of the Bakun plant, the 345-MW San Roque hydropower plant and the 30-MW Benguet mini-hydro plants.

PHBI allegedly spread malicious allegations of wrongful conduct on the part of the nominee directors of PHC to third persons.

“PHC maintains that LHC is a special purpose vehicle formed specifically and solely to undertake the construction of the Bakun plant under a BOT agreement with Napocor. PHBI’s proposal for LHC to engage in the business of an IPPA for the power plants included in the bidding is outside the primary or secondary purposes of LHC and is beyond the original intent of the shareholders of Luzon,” APC said in an earlier disclosure.

PHC said it believes that PHBI and its parent company cannot rightfully compel it to enter into the IPPA business through LHC.

The Power Sector Assets and Liabilities Management Corp. (PSALM) will bid out the contracted capacities of the three hydro plants on Dec. 11, a month later than the original Nov. 11 schedule.