Professional Documents
Culture Documents
Manila Water Inc rate dispute with the Metropolitan Waterworks and Sewerage
System (MWSS)
Manila Water originally proposed a P5.83-per-cubic meter (/cu.m.) increase in its
basic water charge of P25.07/cu.m., but MWSS instead ordered the company in
September 2013 to cut tariffs by P7.24/cu.m. The MWSS decision prompted Manila
Water to elevate the case to the International Chamber of Commerce that same
month, triggering an arbitration process1
TheAppealsPanelrendereditsFinalAwardinfavorofMWSSandtheRegulatoryOfficedisallowingthe
recoveryofcorporateincometax(CIT)byManilaWater.
InitsFinalAwarddated21April2015,theAppealsPanelconfirmedthedeterminationoftheRegulatory
OfficethatCITisnotrecoverablebecausetheconcessionaireisapublicutilityandthatCITisnotoneof
theexpendituresthattheConcessionAgreementallowstoberecovered.
The Appeals Panel,bymajority,ruledthat CITisnot anallowed expenditure under theConcession
AgreementbyvirtueoftheapplicationoftheprinciplesenunciatedintheMeralcocasetotheeffectthatthe
peopleofthePhilippinesshouldnotbeburdeneddirectlyorindirectlywithCITwhichhastobepaidbythe
Claimantasaresultoftheprofitsmadefromitsbusinessoperations.
ThedisallowanceoftherecoveryoftheincometaxtranslatestoaPhp2.77percu.m.downwardadjustment
or11.05%ofManilaWaters2012averagebasicchargeofPhp25.07percu.m.
On22January2013,the
Philippinesformallyconveyed
toChinathePhilippineNotification
andStatementofClaimthat
challengesbeforetheArbitral
TribunalthevalidityofChinasnine
dashlineclaimtoalmosttheentire
SouthChinaSea(SCS)including
1 http://www.bworldonline.com/content.php?
section=TopStory&title=manila-water-rate-cut-afterarbitration&id=106551
theWestPhilippineSea(WPS)and
todesistfromunlawfulactivitiesthat
violatethesovereignrightsand
jurisdictionofthePhilippinesunder
the1982UNConventionontheLaw
oftheSea(UNCLOS).
ThisNotificationinitiatedthearbitral
proceedingsunderArticle287and
AnnexVIIofUNCLOS.The
Philippineshasexhaustedalmostall
politicalanddiplomaticavenuesfor
apeacefulnegotiatedsettlementof
itsmaritimedisputewithChina.
Chinasnine
dashlineclaimis
contrarytoUNCLOSandunlawful.
ThePhilippinesisrequestingthe
Tribunalto,amongothers:
DeclarethatChinasrightsto
maritimeareasintheSCS,like
therightsofthePhilippines,are
establishedbyUNCLOS,and
consistofitsrightstoa
TerritorialSeaandContiguous
ZoneunderPartIIofUNCLOS,
toanEEZunderPartV,andtoa
ContinentalShelfunderPartVI
DeclarethatChinasmaritime
claimsintheSCSbasedonits
so
callednine
dashlineare
contrarytoUNCLOSandinvalid
RequireChinatobringits
domesticlegislationinto
conformitywithitsobligations
underUNCLOS;and
RequireChinatodesistfrom
activitiesthatviolatetherightsof
thePhilippinesinitsmaritime
domainintheWPS.
TheArbitralTribunalhasjurisdiction
tohearandmakeanawardasthe
disputeisabouttheinterpretation
andapplicationbyStatesPartiesof
theirobligationsunderthe
UNCLOS.
ThePhilippinespositioniswell
foundedinfactandlaw
The Department of Foreign Affairs Statement on Chinas Response
to the Philippines Arbitration Case, 20 Feb 2013
The Department received this afternoon from Chinese Ambassador to the
Philippines Ma Keqing a Note Verbale stating that China rejects and
returns the Philippines Notification and Statement of Claim.
The Department stresses that Chinas action will not interfere with the
process of Arbitration initiated by the Philippines on 22 January 2013. The
Arbitration will proceed under Annex VII of UNCLOS and the 5
member
arbitration panel will be formed with or without China.
In its
Note Verbale
, China reiterated its often stated position that it has
indisputable sovereignty over the entire South China Sea encompassed
by its 9
dash line claim. This excessive claim is the core issue of the
Philippines arbitration case against China.
March 39 2014 Philippines submitted its memorial to the arbitral tribunal which is
hearing the case. It presents presents the
Philippines case on the jurisdiction
of the Arbitral Tribunal and the merits
of its claims.
Ordinarily the next step would be a a counter memorial from china however On 21
May 2014, the Permanent Court of
Arbitration (PCA) received a Note
Verbale from China reiterati
ng its position that it does
not accept the arbitration
initiated by the Philippines and that t
he Note Verbale shall not be regarded as
Chinas acceptance of or parti
cipation in the proceedings.