Court to look into “arbitration clause” in Bantay Radyo contract

CEBU, Philippines - The Regional Trial Court wants to look into the “arbitration clause” in the management contract previously entered into by Sarraga Integrated and Management Corporation and the PAFI (The Sower of Seeds) Foundation which requires both parties to resolve their disputes on their own before reaching to court.

RTC Branch 9 Judge Alexander Acosta scheduled a hearing on August 5 to delve into the arbitration clause after the two parties presented conflicting views during the hearing yesterday on the motion filed by SIAM seeking to dismiss the civil case for damages filed by Provincial Board Member Grecilda “Gigi” Sanchez-Zaballero, PAFI president.

Zaballero petitioned before the court to ask for a temporary restraining order and mandatory injunction to prevent SIAM from giving the management contract of the three AM radio stations under El Nuevo Bantay Radyo to Cebu CFI Community Cooperative.

Zaballero has already amended her complaint and included CFI as defendant in the case.

Acosta has already submitted for resolution the TRO sought by Zaballero.

SIAM, through its legal counsel Michael Florentino Dumlao III, sought for the dismissal of the lawsuit.

Dumlao asserted that PAFI should have availed of the arbitration clause in the management contract before filing the case. He said that the arbitration clause stated that the two parties agreed to settle disputes arising from their agreement through mediation.

He added that the management contract signed in June 2005 is still valid up to now.

“There should be arbitration. We are bound by it,” he said.

However, lawyers Edgar Gica and Magnificus Cañete, counsel for Zaballero, said that the arbitration clause is no longer part of the management agreement due to the amendment made in the memorandum of agreement.

Dumlao argued that the memorandum of agreement signed by them in June 2010 is just a supplemental to the management contract signed in June 2005 which is still binding. SIAM president Francisco Sarraga earlier alleged that PAFI has no legal basis to file the case against them.

In their motion to dismiss, SIAM said that PAFI has clearly violated the contract between the parties when PAFI failed to pay or remit in favor of the defendant SIAM the agreed guaranteed income for a minimum of eight months.

Dumlao claimed that they have not violated any of the provisions of the agreement which they have entered into with PAFI, adding that PAFI still owes SIAM more than P2 million.

Gica asserted that PAFI will continue to exercise its rights of management and operation of the three AM stations until July 31, 2018 based on the five-year contract signed by both parties on June 2015 which is effective from August 1, 2015 until July 31, 2018.

Zaballero said that before their contract would expire on July 31, PAFI had initiated a talk with SIAM on December 2014 for the renewal of the contract as legitimate manager and operator of radio stations dyDD, dyHH, and dyZZ.

After verbally agreeing to renew the contract, PAFI deposited P700,000 to SIAM’s account as its initial payment for the financial obligations on April 10, 2015.

But when she came back from the United States, she received a letter from SIAM telling her that it would not renew its contract with PAFI. Instead, SIAM entered into a contract with CFI because the latter has a higher offer.

This prompted Zaballero to contact the representatives of SIAM and send them a letter but she received no response. This prompted her to file a case in court. — (FREEMAN)