THE much awaited hearing between state-owned utility Cagayan de Oro Water District (COWD) and its supplier Cagayan Bulk Water, Inc. (COBI) regarding a dispute on their contract rate will finally start next week.
This was announced January 6 by COWD chairman Gerry Cano during a roundtable with media here.
In 2024, COBI sought an arbitration before SIAC, a Singapore-based firm that is tasked to mediate contract-related disputes between the two entities as stipulated in their 2017 deal.
But according to Cano, the hearing was scheduled only this January 12 to 16.
They had initially held two pre-hearings last year, he added.
In the past two years, COBI and COWD have engaged in a bitter contract dispute with the Pangilinan-led supplier accusing the utility of using the 2020 Covid pandemic as an excuse to declare force majeure to squirm itself out of the three-year rate increase rule as stipulated in their internal contract
In 2020, COBI had informed COWD that it would implement a supply rate increase that year at an average of P4 per cubic meter.
But COWD cited force majeure due to Covid in refusing the increase.
While force majeure is indeed stipulated in the contract, COBI did not recognize the pandemic as qualifying force majeure.
So while COBI continued to bill COWD monthly using the new rate, the utility continued to pay their supplier using the old rate.
The disputed amount has now ballooned to millions of pesos, prompting the arbitration.
According to its website, the Singapore International Arbitration Centre has extensive experience in handling complex high stake disputes in a diverse range of industries including the energy, oil and gas, construction and pharmaceutical industries for clients in Asia and the Middle East.
