Supreme Court ends PCSO-DFNN legal battle over terminated agreement

THE SUPREME Court has granted the Philippine Charity Sweepstakes Office (PCSO)’s petition to withdraw its case against listed IT solutions provider DFNN, Inc. over the termination of the latter’s equipment lease agreement.

In a disclosure to the stock exchange on Monday, DFNN said the Supreme Court issued a resolution on Feb. 20, granting the withdrawal of PCSO’s petition and declaring the case “closed and terminated.”

“The resolution of the instant case puts to rest all civil cases involving DFNN and PCSO in connection with the Equipment Lease Agreement between them, all of which were decided in favor of DFNN,” the company said.

To recall, DFNN inked the equipment lease agreement with PCSO for systems design development and an upgrade for lotto betting through personal communications devices in 2003. However, the PCSO terminated the deal in 2005, after which it started negotiations with third parties for completion of the project.

In May 2015, an ad hoc arbitration panel ruled that PCSO erred when it terminated the lease agreement and, thus, ordered the state corporation to pay P27 million in liquidated damages to DFNN.

The listed company, however, asked the Regional Trial Court ( RTC) in Makati City to correct the monetary award to take into account penalty charges.

The Makati trial court ruled that the award for damages be increased 10 times over to P310 million plus 6% interest from date of finality of the decision. The state corporation later elevated the case to the Court of Appeals.

In November, the CA affirmed the award of over P310 million to DFNN.

Asked on how the payment of damages will be conducted, DFNN Investor Relations and Communications Officer Miren E. Cueto said this would depends on the government’s administrative process.

“The payment to DFNN entails a disbursement of public funds. This would have to go through the proper administrative process for government,” Ms. Cueto said in a text message.

Shares in DFNN closed 3.57% higher at P8.70 apiece on Monday. —