SolGen asks Sandigan help to recover $5.13M

abs-cbnNEWS.com | 07/27/2009 1:03 AM

MANILA - The Office of the Solicitor General (OSG) has asked the Sandiganbayan First Division to set aside a 14-year-old ruling of the Makati City Regional Trial Court that allegedly defrauded the government of an estimated $5.13 million.

The case in question held that the Philippine National Construction Corporation (PNCC), Construction Development Corporation of the Philippines (CDCP) and CDCP International Limited (CDCPI) were ‘one corporate entity’ and ordered it to pay private firm World Universal Trading and Investment Company (WUTIC) its total claim of $2,994,513.65 with 12 percent interest computed from November 28, 1991 until fully paid on top of P3 million attorney’s fees and P500,000 litigation expenses.

In a 29-page memorandum filed last July 22, assistant solicitor general Marissa dela Cruz-Galandines and senior state solicitor Elma Rafallo-Lingan sought nullification of the December 14, 1994 ruling issued by Judge Raul Arcangel, then acting presiding judge of Makati RTC Branch 134 claiming the proceedings may have been attended by ‘bad faith and/or misrepresentation tantamount to fraud’.

Government lawyers estimate the total amount at close to $5.13 million.

“There is reasonable ground to believe that WUTIC received full payment of the judgment debt from CDCP/PNCC,” they said.

OSG said the government was left in the dark while WUTIC’s claim was undergoing trial at the Makati RTC as the Presidential Commission on Good Government (PCGG) only became aware of it in October 1997 when payment to WUTIC was included in the agenda of a PNCC board meeting.

Government lawyers noted argued that the Makati RTC should have dismissed the case outright for lack of jurisdiction since assets of PNCC and CDCP were already subject of an ill-gotten wealth lawsuit against Rodolfo Cuenca who has substantial shareholdings in CDCP/PNCC.

Likewise, they pointed out that WUTIC, by its own admission, declared that it was an assignee of Asian Hardwood Limited (AHL) which was another company allegedly owned by Cuenca.

This was also noted by the Supreme Court in its Decision dated February 23, 2000 directing the Sandiganbayan to conduct trial on the validity of the Makati RTC ruling.

In the said decision, the High Court upheld government objections to PNCC/CDCP’s payment to WUTIC saying, “…there is a valid ground for PCGG to evaluate the validity of WUTIC’s claim as a legitimate assignee, or merely a dummy corporation set up to circumvent the sequestration case.”

“It is a settled rule that any decision rendered without jurisdiction is a total nullity and may be struck down at any time, even on appeal before this Court (Sandiganbayan). Further, a void judgment for want of jurisdiction is no judgment at all; it cannot be the source of any right nor the creator of any obligation,” the OSG memorandum said.

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