.

REPUBLIC OF.THE PHILIPPINES

REGtrONAL TRIAL COURT ,

NATIONAL CAPITAL JUDICIAL REGION
BRANCH 2L3, MANDALUYONG CITY
RT

GLOB,E TELECOM, INC., .represented

by its Hqad National,Carrier Relations,

MELVIN S. SANTOS,

mi

[3Y:

Plaintifl

-.
VCTSL}.S

CNII, CASE NO. MC- rc-4298

,j

'

NEXT MOBILE, INC.,

Defendant.

MORANDUM
----:,,.

Plaintiff

Globe Telecom, Inc. ("globe Telpcom',), by the

uqdersigned counsel and unto this Honorable Court, most
respec[fi-illy states and submits the fotlowins:

PRE.FATORY
a simule
services, rendered

under the Interconnec

ENT

ollection of a sum- of monev for

be Tele,Gom to the de ndant Next Mobile
ent") entered into

bv and belween the plainti{ andrthe defendant.

.Th. Agreerrierrt calls for the payment of the access ,ch.arges

by either of the parties for accessing their respective netwoik,
i.e., the subscriber of one network irr"y call the subscriber of the
other network and vice-versa.

To determine who is payatrle.to, whom un$.er the Agreement

the parties would meet to discuss and compare notes u.f to their
respective inbound and outbound. traffic .rra th. figures agreed
upon is reflected in rhe closure settlement statement.

/':

"}

r.:r rrti @r-ll-ffi4BGRf,

STATEMENT OF. FACTS AND THE CASE

1,1

Sometime in 2002, plaintiff and d,efenclant Next Mobile

or Nextel had entered into an'Agreement. Next Mobile or Nextei,
as referred to in the Agreement, iefers to one and the same entity
(see TSN dated 22 Awgust 2011). The Agreement was entered. intt
f or the purpose of allowing or enabiing the
subscribers of
defendant to access or reach the subscribers of the plaintiff and
vice-versa'. Accordingly, the herein parties mutually allowed each
other to access their respective networks pursuant to the telns
and conditions set forth in their said Agreement, inclucling the
paymenl of the necessary access charges.

,2

coro11ary thereto, herein parties agreed that the

charges fbr the basic voice interconnection service shall hre by
way of the settlement charges/statements, a standard practicl
obtaining in the telecomrrr.rrri.rtions industry
1

1.3 Pursuant to the Settlement

Agreement, herein piaintiff

and defendant agreed to declare to each other their inbound and

outbound Traffic settlement statements within thirty

(30)

calendar days from the end of each transaction month to which

the statenrent pertains, failing in which, the data of the party
who sent its Settlement Statements on time shali amtomaticaliy
be the 'fina1 basis for' the settlement payment. They further
(plaintiff and defendant) agreed that if Uottr parties are able io
send their respective settlement statement within the declaration

period, they have thirty (30) calendar day* to resolve and

reconciie their respective records and'Should both parties agree
witirin the reconciiiation period on the amount to be settled, then
the party with the payable balance shall remit rvithin thirty (l]0)
calendar days from the end of the reconcili;rtion periocl the
se[tlemerrt payment.

7.4 on the basis of the Agreement, the plaintiff allowe d

defendant's subscfibers to ..".rJ it.

calling the subscribers of the plaintiff

".i*orr. by-;;;;hirr.g

an,c

1.5 From the period .starting January 2oo7 and ending

ebruary 2oog, defencrant incr-rrred a total of FouR MrLLroN

ONE HUNDRED THIRTEEN THOUSAND SEVEN HUNDRED
F

TWENTY TWO PESOS & NINETY SIX

(PhP4,

LL3,72?:96l

in unpaid

settlement charges

under their said Interconnection Agreement.

i
/
;:>i--

CENTAVOS

to piaintiff

,1.6 Defendant ac'knowledgad and agreed. to the above-said

unpaid settlement charges as shown and" indicated t,y the
signature of its authorized representative in each o1 the
settlement statements conforming to the arnounts ind.iqated
[]rerern.

.7 The defendant, through its Manager- Switch

operations and Maintenance Dorothy Joy c: Te-jada,
L

acknowledged defendant's said unpaid obiigation ln the foim oi

r-rnpaid settlement charges in the amount of php4,244,026.50
arnd in fact she (Tejada) proposed to pay the sarne on a staggered

basisina,l.etter'c1ai.aizSepternber.2009

1.8

Despite the lapse of a considerable period,of time and

despite repeated demancls from herein' plainfiff, defendant still
failed and continue to tail to pay the said amourrt of
PhP4 ,244,026.50 corresponding to ir.. total, unpaid. settlement
charges to the herein plaintiff. In fact, all, meetings set b_y the
hercin plaintiff and the defend.ant for purposes of settling the
saicl defend,ant's unpaid" obligation were all unilaterally canceiled
at the instance of the defendant for reasons only kntwn to the
latter.

1,9 The oLrstinate and wanton refusal of the herein

defcndant to settle the above-said obligation from the plarint.iff
constitutes clear act of a premeditated-intent,to cause serious
Camage to the herein plaintiff.

i, 10 Thus, on i 5 October 2OO9, plaintiff sent a final

cLemand letter to the defendant demanding immediate payment
thereol trom the herein defendant, but the same prorri.l-. fi_rtile
anC in vain.

u.,
..

ISSUES

The main issue for resorution is: whether or not

the

celcndant after avarling the services of the plaint.iff by acce*ri"g

its
is liable to pay the access .hrrg* to t'h* plaintiif
,network
uinder the Agreement.
The other issues related to the main issue are the follorving:

Whether or not th e def'endant, by reason of its wanton

refusal to pay plaintiff its o blrgatron in th.e tr:tal amount of
1

/
/
\,

7')

P1,ll3;722:a6'in the form of unpaid ,accesS cha.rges in favor of

the plai'ntiff,'is liable to pay plaintiff penalties, inteiest and moral

d

am age s?

2.' whether or not defendant is liable to pay exemplaryJ

'
damages arrd attor,ey's fees under the circu*ot*rr".J?

3.

whether ornot legal cornpensation tras taken effect?

I

D]TSCUSSION

The contract is the law between

the contracting parties'.

3. 1

' Plaintiff

respe

ctfully re-plead.s in this Memorandum all

and
the pieadings and

the submissions in its Complaint

papers as par.t and parcel hereof.
'.

3,2

"11

l;

Basic is the rule that contract is the law between ttrr:

cont,racting parties.

3.3 'rhe Agreement entered into by ancl between the

plaintiff and the defendant is a contract as such the same is tlre

law between thern, thus:

"obligations arising from contracts have the force

of law between the contracting parties and should be
complied in good faith." (Art. 11s9, civil code of the

3.4 'lhe Agreement is clear and categorical

so as to Jeave a
roorn for doubt or interpretation, The
provides for the rates
"ary.' of one party
of the access charges wherever a subscriber
r:aiJs the
subscriber of another party. The access charge ;"--;i,. fec for
terminating a call to'the network of the other party. Iror orderly
3.s who is payabre after 'a splci.fic periocl the
:o*,putation,
interconnec'ting parties, vtz.), Globe 'and' Nexi Mobile, rec.ncile
their respective traffic records and after the reconciiiation rn ill
agree on certain figure to close the account fbr the ;;r.;;;
period., Thc resuit of the reconciliation is then emboclied in
a
closure settlement statement (or closure agreement) sig,ccl by
the parties' authorizecl representatives {Exhs],,8,, io-;p";.

The Interconnection Agreement

is the repository of the terms
of the Agreement.

3.5 'lhe signed agreernent is the repository o[ th,e ternrs

and condition agieed to by the parties, thus:

"'When the terrns, of an agreement have been

reduced to rvriting, it is considered as containing all
[he terms agreed. iiprr,. and there can be, betw."., th"
part.ies ani their successor in interest, no evid.ence of
such terms other than ttre contents of the written
agreement," (Rule 130, Sec. 9, Rules of Court.)

3.6 .Si*ptv

stated.

th

rq

that .thq access charqes referred to in thg Aereement islno_w

SUbject to modification once the Provisional_ Authority (PA) for
CMTS Service of the defendant is
anted by the NTC, We
searchqd thq Agr.g*.rrt for a
to thrt
o, *hi.h th.
"1.*s.
argurnent of the former is moored and we"ffg"t
found none. The
Agreement speaks for itself. It does not .contain-E-.lurr". or a
stipulalion calling for the adiustment or modification of the
Asreement _ lI}qg-:lhq _ defendant wap eranted a provirlqnJ
AUlhp$r*lPA) for its applied CMTS Si;r*. N"
;

"***r
sophistry, casuistry or even semantics courld. change
or even
stretch the piain black letters of the agreelnent. rr"uiy, contra

factum non- est arqumentum.

l"

? T The

rat_es.

of the access charge were not proposed bJ

lt ** tf.. oooosite. The

asseveration of the defendant in its Answer in paragrapr, s.+.s,
rvith due respect, is not accurate. The Agr...*.rri in I letter fbrm
originated. from the herein defend ant and signed" by the
defendant's First vice president, External, i.".I Rolanhr: c.
Aiarcon. what the plaintiff did was:rr.i to affix its signature on
the' conforme portion of the rbtter -agreement. The letter rorrr-1
interconnection agreement speaks for"itself. Again, ,o
"r";;;i
semantics could change the fact that the letteilbr* agreement
originated flrom the defendant.

3 8 NTC Memorandum circular B-g 9s (impleme,tirrg

.
Rules of ]R.A. Tg2s) does speak of automatic adjuslrnerrt of
access charges embtociied in the Interconnection Agreement

to by the interconnecting prss once a party tilereto is

granted a pA or & cpcN for its bntrs service. Ii. ralt, s;. szO
agreed

(g); {Access charges in General) of MC 8-9-95 clearly recog,:rir.o

/

/J

one of thc basic characteristics., in the 1aw on

on contract, i.e.,
autonomy of the wili of the parties in a contract, i.c., ,,1^l)e
contracting parties mury establish such stipulations, clauses,

terr1]s and crlnditions as they rhay deem convenient provided t-hat

they are not contrary tcl law, morars, good. customs, pubiic order
and public policy." (Arl. 1306, civil" code of the irrriuppin"s;,
th,s, "A.,.."" .h^.g.= uh.[ b" ,.guti.ted by th. irt.rqonnecti
pallrqq. .x x x." (sec. s04, p'ar.. g, NTc Mc B-9-9s; ild"r".-o.g
supplied). The access charges ipelled out in the Agreement were
freelv ag:eed upon by the parties, viz., Next tuof,ite and (llobe
'lelr:conr. T'hc fact that the defendant was
later on given a pA ibr
its cM'lS service is of no moment. The invocation of ;h; iiM:ii
P| by .the defendant is not a magic mantra that would change or
alter the plain ianguage of the Agreement freely agreed lrpoi, ty
the parties. il'he Agreemenr d.oes not even containL prorriso or a
reseryation, to ttre effect that the rates. agreed to by the parties
ti'oulcl be subject to modification once thetefendant'*.* g..rntecl
:i PA for its cMTs Service. The defendant is fuliy aware of and so
r-ecognizes the fact that that the granting of the FA by the
NTC fbr
its CMTS Service does not carry *itn it ilotu proprio modi.fication
or- amencment of the rares or any conclitii stipulat.J
ir. ir-*
/\greemenl This is clear from the writi.r, ."rrr*,rrli.",irr,r. rpacle
by the defendant to the plaintiff, vrz., letter of Mr.. ar"..",^;.il;
VP of the defendant, dated 19 September 2001, Annex
r .iir,.
Answe'and letter of Mr. Lamberto S. Ramos, the president,;;
c o o of rtre clefendant, dated July 26
, 2oa'6, aorr"* z oi. th e

Ansltrer.

Next Mobile cannot deviate

from the clear text of the
Agreement. Defendant is now
estopped from taking a posture
subversive of the terms of the

3.9

2oo7,

F.rorn the time the agreement was

"cron.

IVext

agrr:cmerLL

paid to
*Mobile
The testimony

inkcd in 200I ,p

in. rates stated in

of Nulelvin santos is

insl.r.,.t-., ii;r;"'"

"A; currently, Next Mobile has arr

o,tstanding

payable to Globe 'Telecofi of aroun d 4.2 Mirlion

pesos.

Q:

ro
thc:

Prior to this current figure, based on your recorcl,

as head of that division of national car:rier, were

there payments made by the clefendant to Globe

Teiecom previously?

A:

Yes, there were payments made, in farct , tlte 4.2

Million Pesos in question covers the preriod 2oo7
up to. i believe, 2010. But prior to that, Next
Mobile has been settling to rls ba.sed on the
agreed interconnect access charges.

Q:

Se you rrrearr to sav. whern the irlterconnection

Aglqgment was peffected.b the herein parties

and from 2OAl

erfection of I the
,"t:rq""".c!io,
Mobil. *u.. p^vi.,.o th. a..."s cha.q"" tq Glq,hre

Telecom?

A:

Yes, but,onl)r part of 2O07.,,

(1's1'{

dated 22 August 2011, p.. 17; underscoring suppiied)

3.10 rhe Agreement u,as not amended. while there were

requosts made by the defendant to modify the rates embodied in
Agreerrient (trxhibit " A" , this is ,. .orri*or, *"niu1i1 but the
modification drd not materiarrtze, the restimo4y of Ms.
::gl.:!:d
M.ariei Capistrano is very instructive, thus:.
"AT'IY. ESCOTO:
Q:

After the letter re

sts, were sent to

,ou by Next
E rates anA

aq

i-

onii.

i.till"l"

A'ITY." ESCOTO:

Thank you, your Honor.,,'

(TS1\ dared

27 June ZOlt, page 27; underscoring suppLied)

m1

ne testimony of, Mr. Rene Rosales, cf defendant Next Mobile

is
..AT'I'Y.

GOZON:

Sir; during the last time you

were here

for the

purpose of cross-examinatior, you made

mentioned. about the so callecj provisional

issued
by the 'Nettionad
Telecomrnunications,Commission,
is that cortrect,
,,.

authority
str

cs str.

A:

Q:

Do 5rou have. with the cop54 of the said provisional

authority
issued
by the
National
Telecommllnicati@es Commission in connectio:n
with your GSM service?

A:

Yes, sir. I'm sorry not GSM service.

Q:

For what Provisional authority for rnhat?'.

11.

For cellular mobile

o.
'{'

Thank you, sj.r. Now, I?m holding here a five-page

paper, photocopy, I want you to gc over the'same
-and please teII the court what isthe ,elevance <-rf'
that paper in regard to the provisional authority
issued by the National Telecommunicati.ns
Commission to your employer?

A:

Tlris is an Authori zatrort to undertake cr:lluleir

mobile telecom services.

o"
Y'

I I,,

Thank you, sir. Now, in your judicia.l e,rffidavit as

well as duri'g your cross-examinatiorr last time,
sir, you were invoking this provisional authoril-y
for the purpose of compelling Globe Telecom tL
modify or amend the pre-existing inter.connecr
agreement, is that correct, sir?
Yes.

xxx
n'
Y'

)\ow, I want you to review this paper. which you

said is the provisional authority tr yu..i *,,,ptoy.,
in regard to the service for cnais, is ttrat correct?
AJright, I want you to go over....

A:

I'm familiar with the d"ocument.

l

A'I"TY. GOZON:
.

That's why Itm telling you to go over,

COLJRT:

li!
\

Go over that document.

!.:

A'ITY. GOZON:

,,

I want you to point out the specific provision in

Q:

that provisionai authority pointing orri thr.t G1obe

Telecom is supposed to modify the i'terconnect
agreer,rent on the basis of that paper. point out
specific provision in that provisional authority.
I.t

A.:

is the whole...

A'MY. GOZON:
You please point out. your Honor, rnay I request
thc r,virness to please [be] admonish[ec{i tc ,,.r***,
the questron as propounded.
COU}?-T:

Q:

Is thcre a provision in that contract?

A:

There is no_jspecific prpvision but the r:ntire pA is

the very essence why u'e are requesting for l.he
amendment or the review of the lnterconnection
because it was only during that time ., rn-en we
,received this ; paper that we realizerl that the

'

companlts are not sufficient to cover the actual

phy*ical interconnection that we have
ir,.

'i

nterconnectj on agreement.

"gui.r.i

A'ITY GOZON

lhat the:e is

Q:
'ar
Spgcrtic provisionf

A:

Yes. sir,
_

)'.

no

In this

Q:

PA?

A: ',
Qr
'l

A:

r/

(l;
\c.

'i'hank you, sir. Now, going back agaln to thrs

paper, I want you to go over again 1"he
,game and
please tell before this Couri if there
is' any
rnention in this paper as tregard !o: the access
cirarge between your companv . , ?rr.d. Globe

Yes. srr.

...,..

n1l

Telecom?

ATTY. UY:

Your Honor, the witness already answer. that it is

the rvhole...
')'

" r

._

COURT:
m1

The whole contents of the document.

, 'i

ATTY. UY:
-i

,I

Yes, Your Honor.

COURT:
..

,.

,,1

...

,.

l.

''Alright, 'let him answer-

..: .t.'
..
"
A'MY, GOZON:
'',.',:
/111
I
\,/.^--,--your TY
I nanK
you,
Honor.
,.

. :

':

COIJRT:
I-{ou, u,ould you
responcl to that?
r+
I

(J:

t.

yoy fi-ld .a',y. provisio^n r as' to the access

t.,
charge ilyojving the interconnect
.

only for Globe Uut for

agreement
---- :-- noi
^:"'

othe..*.ri.ra-l-

',./ /,,/,
i
/r

A: It's not a direct...

A'IIIY. GOZON:

It's not. Alright, thank yop.

WITNESS:

A: Eut there is a fourth

paragraph here that states

rhat "in view of the foregoing, Next Mobile is

hereby granted provisional authority to

install, operate and maintain a mobile
telecommunication system, to offer services
and to charge
rates therefore subject to such
'conditions
terms and
set forth i; a separate

order to be issued by the Commission.,, This is

Lhe one that pertains to rates

A'N]Y COZON:
Q:

It says "rates"?

A:

Yes.

Q:

Is there any fiIention about the access

charge?

I'm asking about the access charge not ttre ratJ.

A:

Access charge is dependent on the rates.

Q:

Be that as it may, is there any__Usliqqn there

abgut the word acc

-41

)'

None.

No'e. Thank you, sir. By the way, please tell ttre

court, based on this , paper, rn hen was this

granted? Teil the court, please, holcl the paper.

know it's 2006. There is no sper:ifi<; d.nte here,

but,.

Q:

yAnt to draw vour attention

A:

;l

Q:

And the Interconnect AqreemenL_fygS___fqkgd

When?

A:

S@

COURT:

Q:
A:

The Interconnection Agreement?

The insufficient Interconnection Agr.eenrent,
.::I

A'ITY. GOZON:
Q:

Just to clarifvi sir. the'Interconneclion Agreement

was per:fected rvav ,ahead of the issuance of the
provisionai "authoritll, is that correct? ygs of_Eg,
s1r.

IA'
t.

Yes."

(TsN dated 11 March 2o13, p. 4-Ll; underscoring suppliecl)

11 The defendant cannot now take a posture that is not
within the plain text of the agreement. In fact, the d.efendant anj
the plaintiff had on previous occasions rnade *.ttr"r"lrril;;;;;
in order to determine who, is payable to whom. rn -outco*e of
these serrlement meering=
.*Loai"o-^ ir,
Settlcment statements 1csx1, trxhibit;;8,, to ,,p,, and, i" f;;;, th;
herein dei'enclant has acknowledged and admitteJ ir."t it owes
:1.^Itiintiff Php1,244,o26.so. rhls ;"
3"

"[rl*"L"t;;;

'u.i.

;;;;ffi;;;

J.,*#.;

2ao9 letter of Ms. Dorothy Joy Tejada, the Manage,

il;
',,i,;i
defend ant for Switch operation" .rra Maintenance
"a
itr"rr.
N'B : A1I the^documentary exhibits of the plaintitf are atta.r,.J
t.,
[he rccord of the case.

3.12'lhe .defendant surely cannot take now a posturc-: ttrat

is contrary to lhe foregoing. it is now estopped t.o assulre a
Cilferent stand. Thus:

"on equitable principles, particr-rrarly on tire

ground of estoppel, we must ,ui. against petitioner"
B'ank, ''iThe doctrine of es
lis sEC[ upon the
ollnds of r:ublic noli

lair dealin

egalp$_his own act. representations,

faith

ffi

anel

FEry---"i{'-.=

=Y-tr:'

!p

who reasonahl)r replied ,thereon. ,The doctfine of

estoppel sprinss from equitable principles and the
equities in the case. It is desiened to.aid the 1aw in the

administration of justice where without its aid

qiustiee mi
lt has been applied by this

Court wherever and whenever special circumstances of

a case so demand." (Phiiippine l{ational B"ank v$.
Court of Appeats, G.R. No. L-30831 and SlI7G,
November 21,1979,94 SCRA 357, at p, E6B, citing 28
Am.Jur 2d, Estoppel p.28; underscoring supplied)

The plaintiff is entitled to

moral and exemplary damages
and attorney's fee.,
3. 13

The defendant is liable to pay moral, and

exem plary

damages and attornev's fee.

3.14 The wanton refusal on the part of and the taking of the
posture b1' the defendant subversive of the eLgreement is a clear
rnanifestation of bad faith on its part that would warrant the
award of rroral arid exemplary damages. The Aqreement is the
contraCt itself and at the same time th.e repository of the terrns
arld corlditions aqreed upon bv the parties. An deviation from
the clear 1-ext of the asreement
either
to a contract rs
anathema to the basrc-qqtion of bona fide. The wanton refu
bv
the defendant to p

lalls

kilfi

_ord._!y!th_sqsd

thus:

.)t

"Art. 19. Every person must, in the exercise of his

rights and in the performance of his duties, act with
justice, given everyone kris due, and ,observe honesty
and good faith." (Art. 19, Civil Coa@
suppliecl)

for this reason the herein 'plaintiff is entitled to the

morai arnd exemplary clarnages.

arn

arrl of

i5 'lhe Agreement is clear and cafegorical as'to the rates

o[ the access charges applicable for accessing the netr,l,ork of
3.

either of the parties. In'fact, on previorls occasioris, the defe::rclant

made payryents pursuant to the terms of the Agreement. It is
regrettable that defendant took later a posture that is nclt ip
cadence with the Agreernent.
/,.
/

WHBRBFORE, premises considered; it is most respectiirlly

prayed of the ,',Honorable Court to render judgment, ordering
defendant to pay plaintiff the follodrg, to wit:
1a

a..

Defendant to.: pay the r,rnpaid obtigation by wery of

sett.lement charged under their Interconnection Agreernent in the

amount' of FouR MILLION oNtr HUNDRtrD THIRTIDEN

TI{OUSAND SEVEN HUNDRtrD TWENTY TWO & 96I lOO
(PhP4,113 ,722,96) plus legal interests;

b.

Defendant to pay plaintiff morar d.amages in the

amount of FivE HUNDITED THOUSAND pESoS (php500,000.00);

c.

Dcfendant to pay plaintiff exemplary damages in

tkre

amount of TWO i{UNDRED THOUSAND ppsos (php20b,0o0;00);

d' I Defendant to pay jo,intly and severaily piainti{f tkre

arnount of Two^FTUNDRED THOUSAND pEsos tptpzobiob.il)
as and
by way of attorney's fees; and
-

e.
I'l

^vvv,

q^^\4

Defendant to pay the costs of suit.

'other measures of relief equitable under

'
f
i.lKewlse
prayed1 lor.

ur{e premises are

Taguig city for lVlandaluyong city, o4 August 20 14.

SALALIMA CASTELO & UNGOS

Counsel for the Plaintiff Globe Telecom, lnc.
28th Floor, The GloU. fo*.-,
32"c Street cor. 7th Avenue,

ig 163a
irlo{ 797'2642
By:

.--:j*)i'i

Roli of A/torney No . 34026

{BP No. 948 S4Z I Ot-o2-2o 14 lKalmana
PTR No. A-20 y6977 101-02-2 O14lTaguig
MCI,tr Exemption No. IV-0002 84 lOg-iB_iAtZ
/l)

l:i

GI
A.
" RoIl of
46
IBP No. 9
18IALA2 2A14 Itr:'Samar

MCLE'Cor4p. No. IV-OOOBB47 I LG 24-20 12

i

uopv
- L-J t urnrsned:
.r)

LLO CONCtrPCION RtrGALA & CRUZ

Counsel for ,the.Defendant Next Mobile, Inc.'
22nd F 1oor, ACCRALAW Tower
to>s
Second Avenub corner 30th Stieet
Crescent Park WeSt, Bo-nifaqio Global City

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EXPLANATION O[] S]DRVICE VIA REGISTERED MAIL

Due to lack of material time and perso, nel1in serving a col)y
oi this plead"ing, the same was served
gigtbred maii.

M. GOzON