PBA must pay GAB P3.4 million

MANILA, Philippines - The Supreme Court Friday ruled that the Philippine Basketball Association (PBA) must pay the Games and Amusement Board (GAB) P3,452,233.32 representing GAB’s three percent share in the PBA’s gross receipts and income from the television and radio broadcast for 2002, regardless of whether those had already been received by the PBA.

The Supreme Court, in its 11-page decision penned by Justice Arturo Brion, affirmed the Court of Appeals’ July 28, 2005 decision and rejected the PBA’s motion for reconsideration.

The case stemmed from the PBA’s failure to remit the amount due, citing failure of Viva Vintage Sports to pay the franchise fees.

In December 1999, the PBA and Viva Vintage Sports, Inc. (VVSI) signed a Memorandum of Agreement (MOA) granting VVSI exclusive rights to broadcast the PBA games on television and radio for the 2000-2002 PBA seasons.

VVSI paid the franchise fees to the PBA until Nov. 2001 when it started to default in its payments.

In January 2004, PBA wrote VVSI a letter demanding payment of unpaid fees.

VVSI’s failure to pay fees affected PBA’s own ability to remit GAB’s share of gross receipts and income required by Sec. 8 of PD 871.

The GAB maintained that the PBA was still obligated to remit 3 percent.

The PBA and GAB submitted the case to the Office of the President for adjudication.

Subsequently, both entered into a MOA where the PBA agreed to deposit the assessed amount in escrow with the Equitable-PCI Bank pending resolution of the case.
In 2004, the OP ruled in favor of GAB on the grounds that PD 871 intended the PBA to pay GAB the equivalent of 3 percent of its gross revenue and income from television and/or radio broadcast once earned; that income is considered earned when one’s right to it becomes fixed under the terms of the government contract; that it does not matter whether PBA has actually received the fee due it from its franchisee, or whether this franchisee has physically transferred the amount to PBA, among others.

PBA sought its reconsideration but the OP had denied the same.

When GAB sought the release of the fund in escrow, the PBA then filed a petition assailing the OP’s decision with the CA.

However, the CA ruled in GAB’s favor. The CA said that PBA’s Rule 65 petition for certiorari was not the appropriate remedy to challenge the OP decision.

But even assuming it was a correct remedy, the CA found the OP committed no grave abuse of discretion in interpreting the implementing PD 871.

The SC ruled that the PBA should have appealed the ruling of OP to the CA within 15 days from notice, and its failure to comply with the prescribed process is a ground for dismissal of its petition.

“As a pure statement of fact and without any pejorative meaning intended, the remedy the PBA used appears to us to be an error of counsel that the PBA - the client - wholly bears. It is absolutely incorrect to claim that Rule 43 does not allow an immediate remedy if that had been the result desired. Section 12 of Rule 43 expressly allows the CA to order a stay of execution upon such terms as are just. Separately from Section 12, Rule 43 is Rule 58 on injunction as a provisional remedy that could have been used, with proper supporting justification, to stay the implementation of the OP decision. Running counter, of course, to any move to prevent the release of the fund in escrow is the PBA-GAB   MOA before the OP, where the parties expressly agreed on the disposition of the funds after a decision shave have been rendered,” the High Court said.

The Supreme Court also held that the CA did not act without legal reason in dismissing the PBA petition.