Court approves compromise agreement of city, Kaltimex
The Regional Trial Court Branch 60 approved the compromise agreement between the city government and the Kaltimex Energy Philippines, Inc. to settle the court case for the rescission of the latter’s contract for the rehabilitation and operation of the Asin mini-hydro power plants.
In a judgment dated Feb. 13, Judge Rufus Malecdan, Jr. directed Kaltimex represented by Jurist Awal to pay the city government within the month of February P13,633,500 as liquidated damages and P605,000 reimbursement of the filing fee incurred by the city in Civil Case 8957-R.
The court also gave the go signal for the city to issue the notice to proceed to the company based on the terms in the agreement.
The other terms are that Kaltimex will replace and update its performance bond of P150 million from a bonding company acceptable to the city and that Kaltimex will also take physical possession of the three mini-hydro power plants within three days upon notice by the city mayor and thereafter within the next four months from the expiration of the three-day period will make them operational.
The accord further stipulates that the city will withdraw the case upon the company’s payment of the damages and filing free.
Kaltimex will also be bound to comply with the terms and conditions of the compromise agreement as well as the MOA dated Jan, 30, 2015.
Its failure or refusal to comply will entitle the city to extrajudicially terminate the MOA, to file appropriate court cases and to forfeit the performance bond in its favor.
Kaltimex won the bid for the rehabilitation, upgrading, expansion, operation and management of the three mini-hydropower plants of the city located in Asin, Tuba, Benguet and entered into a memorandum of agreement with the city on Jan. 30, 2015 which was confirmed by the city council on Feb. 9, 2017.
It however failed to comply with its contractual obligations under the MOA and later refused to heed the succeeding demand letters of the city to remit its monetary obligations then computed at P68.1M thus prompting the city to file a civil case for the cancellation of the contract with damages.
In August last year, Kaltimex Energy Philippines Executive President Engr. Jurist Awal served to the new city officials their intent to pursue the project with an offer to pay part of its computed obligation in exchange for the withdrawal of the case leading to the compromise agreement. – Aileen P. Refuerzo