MWSS, Maynilad feud continues

Controversy continues to hound the dispute between the government and the Maynilad Water Services Inc. (MWSI) with the latter opposing former Supreme Court Justice Florentino Feliciano’s nomination to the three man international arbitration panel with little time left before hearings start. The hearings, scheduled to start in February, will determine who to blame for the fallout between the Metropolitan Waterworks and Sewerage System (MWSS) and MWSI, which two months ago opted for an early termination of its water concession.

Feliciano, a noted international arbitration lawyer and once an arbitration judge of the World Trade Organization (WTO), was named by MWSS to the panel but MWSI objected to this in a Jan. 22 letter.

If MWSS is found to be liable for the alleged breach of contract, prompting MWSI’s termination of the agreement, the former stands to cough out as much as P17 billion in damages. But as MWSS admitted in the past, it cannot afford to pay such damage cost and the Philippine government in the end will shoulder it. MWSI, on the other hand, has reportedly named lawyer Antonio Picazo to the panel, with no objection from MWSS. The International Chamber of Commerce, which has jurisdiction in the concession agreement signed in 1997, has chosen the third member and chairman of the panel.

Under arbitration rules, the consent of one party for the other’s nominee is required. All the panel members are supposed to be independent.

Sources at MWSS said MWSI is yet to substantiate its opposition to Feliciano’s designation.

"If we are unable to agree on the last member, the panel chairman will be the one to pick him or simply reject the objection if it is found to be without basis," said an MWSS source.