Supreme Court rules in favor of private firm in casino row

MANILA, Philippines­ – A private company has the right to operate a casino inside the Clark Special Economic Zone in Pampanga (CSEZ), according to a recent ruling of the Supreme Court.

In a decision, the High Court upheld the validity of the memorandum of agreement between Fontana Development Corporation (FDC) and the Philippine Amusement and Gaming Corporation (PAGCOR), granting FDC the authority to operate the casino inside CSEZ.

In the same decision, the High Bench denied for lack of merit PAGCOR’s petition for review and affirmed the May 19, 2009 decision of the Court of Appeals, which affirmed the orders of the Manila City Regional Trial Court branch 7, denying the gaming body’s motion to dismiss FDC’s temporary restraining order application.

The High Court made permanent the writ of injunction issued on February 25, 2009 by the Manila RTC and ordered the PAGCOR to honor and comply with the stipulations of the MOA.

The SC held that PAGCOR has no legal basis for nullifying or recalling the MOA with FDC and replacing it with its new Standard Authority to Operate which, among others, would have made the extension of the said MOA on a month-to-month basis until the finalization of the renewal of the contract.

It also ruled that there “is no infirmity in the MOA, as it was validly entered by PAGCOR under its charter, PD 1869, and remains valid until legally terminated in accordance with the MOA.”

The Court maintained that PD 1869 empowers PAGCOR to regulate and control all games of chance within the Philippines, and clearly, RA 7227 (SBMA’s charter), or EO 80 cannot be the source of its powers, but its basic charter.

In 1993, then President Ramos issued EO No. 80 which, among others, gives the CSEZ all the applicable incentives granted to Subic Bay Special Economic Zone. – By Dennis Carcamo (Philstar News Service, www.philstar.com)