The Supreme Court (SC) has ordered a status quo stopping a lower court from seizing the assets of the National Power Corporation (NPC) virtually averting bankruptcy and a nationwide power interruption.

The order, issued by the SC’s Third Division on January 7, was meant to prevent the Quezon City Regional Trial Court (RTC) from seizing Napocor assets to satisfy a judgment in favor of some 5,648 employees of the power firm who were dismissed in 2003. The amount involved is at least P33.75 billion.

In issuing the order, the SC acted on an urgent motion filed by NPC asking for the deferment of the execution of judgment and issuance of temporary restraining order (TRO) against the lower court, which earlier ordered the garnishment of NPC’s assets, including its bank deposits and future receivables from power consumers.

The power producer, in its motion, said “by garnishing and effectively freezing its monthly financial receivables from power customers, NPC would be unable to support and sustain its operational and maintenance expenses – including those needed to finance its monthly fuel supply requirement, payment of capital expenditures, and payment of personal services, i.e. salaries of respondent Napocor employees.”

Its total monthly expenses amount to almost P10 billion, the NPC said.

The NPC assailed the QC court, particularly its ex-oficio sheriff and clerk of court Atty. Perlita Vitan-Ele, for the “premature and hasty execution” considering there are still issues in the case that the SC has yet to resolve.

“Sheriff Vitan-Ele singlehandedly exposed the country’s power generation service to imminent disruption, to the prejudice of the Filipino people,” NPC said.

The NPC warned that if the RTC is not restrained from garnishing its assets, the power firm and its co-obligator, the national government, “would be unable to pay existing contractual obligations to numerous independent power producers (IPPs).”

“The probability for these IPPs and other NPC creditors to declare the respondent in default cannot be discounted, thereby causing acceleration of government’s obligation to pay its power debt amounting to more than P4 trillion.

“Truly, the unwarranted, hasty and irregular acts of Sheriff Vistan-Ele trigger not only the possible bankruptcy of respondent NPC but also the national government as a whole.”

Last December 2, the SC ordered NPC’s top officials to explain why they should not be held in contempt for ignoring the original decision nullifying the National Power Board (NPB) resolution dismissing the NPC workers.

It directed the chairperson, board members, and president of the power firm to comply with its Dec. 10, 2008 resolution by submitting the list of all workers affected by the restructuring of NPC to the RTC, which would then compute the separation pay, back wages, and wage adjustments due the dismissed employees from January 2003 up to September 2007.

The DEc. 2, 2009 and Dec. 10, 2008 resolutions were offshoots of the September 2006 decision of the high court rejecting a resolution terminating the services of the 5,648 employees by the NPB, which is made up of the NPC president and eight Cabinet secretaries.

The SC ordered the board to reinstate the employees or give them a separation package.

The employees who sued the NPC were members of the NPC Drivers and Mechanics Association and the NPC Employees and Workers’ Union.

Last Dec. 23, the Quezon City RTC demanded the NPC to pay the dismissed employees the amount of P33,751,294,374, including the 10 percent attorney’s charging lien, and P1,012,539,431.22 to the court as lawful fees and costs for the execution of the Dec. 2, 2009 resolution of the High Court.

That same day, the RTC issued notices of garnishment to Manila Electric Company (Meralco), Land Bank of the Philippines (LBP), Philippine Electricity Marketing Corp. (PEMC), and the Philippine National Bank (PNB).

However, in its Jan. 7 order, the SC directed the parties to “maintain the status quo in this case prevailing before the issuance of the resolution dated 2 December 2009 such that no NPC assets/ deposits shall be garnished until further orders from this Court.”

The SC likewise required the dismissed NPC workers to comment on the power firm’s motion seeking to reconsider the Dec. 2, 2009 resolution until 12 noon Monday.

It also set the case for oral argument on Wednesday at 2 p.m.