SC favors Quiambao group in Stradcom dispute

The Supreme Court building in Manila. INQUIRER FILE PHOTO

MANILA, Philippines—The Supreme Court has ruled that the business group led by Cezar Quiambao was the rightful owner of Stradcom Corp., paving the way for the information technology (IT) service firm to collect billions of pesos in receivables for services rendered to the Land Transportation Office (LTO).

In a resolution, the high tribunal’s Second Division said the intracorporate dispute, as alleged by the group of Rodolfo Millare, was a mere “nuisance suit.”

Millare is allied with the group of Bonifacio Sumbilla, who claimed to be a stockholder of Stradcom and, as such, tried to take over the company’s database facilities at the LTO headquarters on Dec. 9, 2010.

Along with 40 armed followers, the take-over attempt resulted in a six-hour standoff that caused in a stoppage of LTO services for the issuance of drivers’ licenses nationwide.

Since then, the LTO has withheld payment of over P4 billion in fees it owed Stradcom prior to the ownership dispute being resolved by the courts. The Supreme Court decision paves the way for the funds to be paid to the Quiambao-led Stradcom.

In its decision, the Supreme Court upheld the ruling of the Court of Appeals that the intracorporate complaint filed by Sumbilla and Millare against Stradcom’s board of directors and officers was a nuisance suit.

It also upheld a 2011 Quezon City Regional Trial Court resolution that said the alleged officers from the Sumbilla group were not stockholders of Stradcom International Holdings Inc., and therefore had no cause of action against the Stradcom officers led by Quiambao.

The Department of Justice—after an investigation in the wake of the 2010 standoff—ruled that there was clearly an attempt at a forcible takeover by the Sumbilla group and recommended the administrative or disciplinary actions against LTO officials who were found to have connived with them.

In 2011, the LTO filed an interpleader case in Quezon City Regional Trial Court Branch 222 and cited the pending case against the Quiambao group as the reason for withholding payments to Stradcom Corp.

Soon after the administration of President Aquino came into office, it reportedly ordered the scrapping of the LTO contract with Quiambao, alleging that the deal was disadvantageous to the government.