DOE opts to ‘honor sanctity of contracts’ in Malampaya arbitration caseThe “nationalistic approach” sounded off by the Department of Energy (DOE) on the multi-billion Malampaya arbitration tax case signifies honoring sanctity of contracts so it could guarantee continuous flow of investments in the upstream petroleum sector. In fact, aside from the Service Contract 38 of the Malampaya project, all other petroleum exploration and development contracts carry the same provision. The energy department is a relevant counter party in existing service contracts in petroleum exploration ventures, hence, industry players have sought a firmer action from it relative to the Malampaya case. By far, industry players in the upstream petroleum sector have already raised serious concerns about “policy uncertainties” that may interrupt business model, and could subsequently halt investment flows in the sector. The case was elevated to international arbitration proceedings by the Malampaya contractor, but relevant Philippine government agencies have yet to get their acts together as to what common stand they will pursue.

Source: Manila Bulletin September 21, 2016 14:18 UTC