SC junks GMA Network case seeking to nullify ABC5 agreement with Malaysian company

MANILA, Philippines – The Supreme Court (SC) dismissed the petition filed by GMA Network and its wholly owned subsidiary Citynet Network Marketing and Productions Incorporated (Citynet) that sought to nullify the agreement between then-ABC5 and Malaysian company Media Prima Berhad (MPB) and Primedia.

The High Court’s Second Division, in a 30-page decision penned by Senior Associate Justice Marvic Leonen, upheld the Court of Appeals ruling dated October 16, 2012 that affirmed the Quezon City Regional Trial Court’s ruling. The lower court’s decision dismissed the complaint filed by GMA Network due to lack of jurisdiction.

In its decision, the SC said it has no jurisdiction over the concerns raised in the petition.

“Here, the issue of whether to nullify the Blocktime Agreement between respondents ABC5 and Primedia for its supposed constitutional and statutory violations is intertwined with the issue of whether it had indeed, as petitioners allege, transferred control and management of ABC5 to Primedia, which is a factual question within the Commission’s sphere of concern,” the High Tribunal said.

“More, the imputations of illicit combinations and business practice against respondents rest on the competence of the Commission, which is in the ‘best position to judge matters relating to the broadcasting industry as it is presumed to have an unparalleled understanding of its market and commercial conditions’,” the SC added. 

The High Court added that the lower court was right in pointing to the National Telecommunications Commission (NTC) to address the factual issues raised by GMA Network.

What happened before

The concern started in 2008 when it was reported that ABC5 sold all its airtime to Primedia, except for news and Christian programming, through a Blocktime Agreement. Allegedly, the acquisition was part of the Media Prima Berhad’s investment strategy to build a company in the Philippines which it would be the 70% owner.

In their case, the petitioners claimed even if Primedia’s Articles of Incorporation stated that it was Filipino-owned, it was still allegedly a subsidiary of Media Prima Berhad. GMA Network added that the agreement should be declared void under article 1409 of the Civil Code because it allegedly violated the limitation in ownership under the 1987 Constitution and the Anti-Dummy Law.

The petitioners added that Primedia’s control and management undermined the nationalized broadcast media and allegedly resulted in unfair competition among local broadcast networks.

In its defense, ABC5 said the NTC has jurisdiction over the concern on unfair competition. It added that the summary dismissal of the case is warranted due to GMA’s alleged violation of the Rules of Court when it pursued the case despite having previously filed a letter-complaint before the NTC.

With this, the petitioners allegedly acknowledged NTC’s jurisdiction over the concern. In addition, ABC-5 also pointed out that the petitioners have yet see the Blocktime Agreement they sought to nullify so they cannot say which part of it allegedly violates the law. – Rappler.com