Globe asks NTC to suspend hearings on PLDT-Digitel deal

MANILA, Philippines - Globe Telecom has asked the National Telecommunications Commission (NTC) to cancel or suspend all proceedings or hearings pertaining to the deal between Philippine Long Distance Telephone Co.(PLDT) and Digitel Telecommunications Phils. Inc.’s (Digitel) involving the sale of the Gokongwei Group’s 51-percent stake in Digitel to PLDT.

Globe noted that the Supreme Court last June 28 ruled that PLDT is not a Philippine national but a foreign corporation. “Therefore, PLDT cannot engage in the operation/provisioning of any telecommunications services; much less can PLDT acquire the initial 51.55 percent of the issued and outstanding common stocks (the controlling shares) of co-applicant Digitel in this case and Digitel’s subsidiaries nor can PLDT tender offer for the balance of the controlling shares….” Globe lawyers said, quoting portions of the SC decision in the case filed by Wilson Gamboa against Hong Kong-based First Pacific’s Anthoni Salim and Manuel V. Pangilinan, and PLDT’s Napoleon Nazareno.

The Ayala-led telecommunications company said the NTC cannot ignore, much less defy/disregard, the SC decision of policy in Section 11, Article XII of the Constitution, which, being self-executory, needs no implementing legislation.

It also quoted Article 8 of the Civil Code which states that “judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal system of the Philippines,” adding that all laws of the land are deemed written in every contract.

Globe chief legal counsel Rodolfo Salalima pointed out that the main or pivotal issue in the SC ruling is whether or not PLDT is a Philippine national or, conversely, a foreign corporation, “the latter a fact admitted and uncontradicted by PLDT’s officers Manuel V. Pangilinan and Napoleon L. Nazareno in that Supreme Court case.”

“This issue is also the main, priority or prejudicial issue in the instant case, which issue cannot be re-litigated and re-decided in this case because to do so would be a violation of the doctrines of the rules of court on litis pendentia, splitting a cause of action and/or forum shopping sanctioned by the rules of court and the Supreme Court circulars on the matter,” he said.

Globe emphasized that co-applicant PLDT has no legal capacity/personality and, therefore, PLDT has no cause of action in the case before the NTC because PLDT is not a Philippine national or a public utility/telecommunications company.

“This also shows PLDT’s failure to comply with the “jurisdictional requirements” as to the legal capacity/personality of PLDT, which jurisdictional requirements were only provisionally accepted by the NTC Order,” Salalima said.

He stressed that the NTC can do no better than the Securities and Exchange Commission tasked by the SC to implement its aforesaid PLDT decision. “Thus, the NTC en banc must first convene to discuss the full impact/implications of the Supreme Court decision on the PLDT-Digitel deal subject of the present case,” Salalima added.

He explained that it is necessary to cancel/suspend further proceedings/hearings in the present case since said hearing will be a useless formality and an inutile excursion into futility.

“Otherwise, too, if NTC nonetheless proceed to hear and resolve this case, any affirmative ruling by this commission approving the joint application will be incongruous, ugly and absurd because the NTC as a quasi-judicial body cannot overrule and set aside the Supreme Court decision that PLDT is not a local public utility but a foreign corporation. Applying the said Supreme Court ruling in the instant case, PLDT, thus, is not entitled as a matter of right to buy or acquire the controlling shares of Digitel and the target companies in this case to wit: co-applicant Digitel landline, Digitel Mobile Cellular (Sun) and Digitel Crossing,” Salalima said.

 He noted that the SC ruled that the maximum 40-percent foreign equity/capital in a public utility must be based on the total voting shares of any public utility and that PLDT’s second witness, corporate secretary Lourdes Rausa-Chan, on cross-examination confirmed that roughly 60 percent of PLDT’s total voting shares are owned and controlled by foreigners.

He said PLDT cannot legally buy the initial 55.55 percent of the controlling capital or voting shares of Digitel because PLDT is not a Philippine national or a legal domestic public utility but a foreign corporation.