THE Supreme Court (SC) reiterated its order for the Canada-based Marcopper Mining Corporation to repay its more than $5.43 million restructured loan obligations to the Rizal Commercial Banking Corporation (RCBC).

In a 14-page resolution penned by the now-retired Associate Justice Leonardo Quisumbing, the SC’s Second Division denied the motion filed by Marcopper seeking a reconsideration of its September 12, 2008 decision for lack of merit and for failure to raise any new argument that would warrant such reconsideration.

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“We have thoroughly reviewed the records of the case and we find no reason to change our previous ruling that there was no agreement for RCBC to execute a partial release of mortgage and pledge,” the Court ruled.

The high court, in upholding its September 2008 ruling, said records of the case would bear that RCBC did not accede to the partial release of mortgage and pledge from several properties of the mining firm.

Among these considered assets were six Rig Haul Trucks, one Demag Hydraulic Excavator Shovel, and shares of stock of the Baguio Country Club, Canlubang Golf and Country Club, Philippine Columbian Association, and Puerto Azul Beach and Country Club.

What RCBC conformed to, the Court said, was only the repayment scheme proposed by Marcopper, pursuant to the July 8, 1997 letter of RCBC officials as to the assignment to the bank of the Forbes Park property and the execution of two promissory notes.

“On the contrary, when RCBC signed the deed of assignment, it expressly agreed to release the mortgage and pledge on the express condition that Marcopper would pay the promissory notes which have become due,” the SC said.

In its assailed decision, the SC ordered Marcopper to pay penalty equivalent to 36 percent per annum of the amount due and unpaid under non-negotiable promissory notes no, 21-3697 (US$2,698,485) and 21-3797 (US$2,727,000) or the total amount US$5,425,485. It likewise ordered Marcopper to pay RCBC attorney’s fees equivalent to 20 percent of the total amount due.

The SC gave credence to the bank’s assertion that it did not have any obligation to release any mortgage or pledge because the parties did not have any agreement for RCBC to do so.

Based on the review of the written exchanges between the two parties, there was no written agreement ever executed by RCBC and Marcopper for the former to execute a partial release of mortgage and pledge upon assignment to it of the Forbes Park property.

“Marcopper cannot renege on its obligation to pay the promissory notes under the pretext that there was a previous agreement between the parties for RCBC to effect a partial release of mortgage and pledge upon assignment to it of the Forbes Park property,” the Court ruled.

The tribunal also noted that RCBC agreed to a partial release of the mortgaged properties only in its letters dated December 15, 1997 and December 17, 1997 on the condition that Marcopper first pay the first amortization which fell due on November 24, 1997.

It noted that the July 1, 1997 letter from Marcopper treasurer Nicanor L. Escalante to RCBC merely listed two options of payment of Marcopper’s loan to RCBC while the July 8, 1997 letter from Marcopper to RCBC modified the terms of payment as to the second option listed in the July 1, 1997 letter.

“Even the letter dated November 24, 1997 from Marcopper chairperson of the board Joost Pekelharing to RCBC makes no allusion to a written contract. The letter merely stated MR Holdings agreed to release the Forbes Park property upon Marcopper’s assurance that RCBC will release from mortgage six units Rig Haul and one unit Demag Hydraulic Excavator Shovel,” the SC noted.

The Court added that Marcopper anchored its assertion that there was an agreement between the company and RCBC on the testimonies of its witnesses who claimed the two firms had agreed on July 3, 1997 to the release of the mortgage and pledge properties as a condition to the assignment of the Forbes Park property and ultimately the payment of the promissory notes.

Marcopper contended that RCBC has agreed to execute a deed of release from mortgage and pledge of the said properties in exchange for the assignment to the bank of its Forbes Park property. The mining firm has issued a deed of assignment of its Forbes Park property on August 1, 1997 to RCBC.

In its letter to RCBC dated November 24, 1997, Pekelharing stressed the need for the bank to release the mortgaged properties stressing that MR Holdings, Ltd., successor-in-interest of the Asian Development Bank, agreed to release its line on the Forbes Park property subject to the release of the said properties.

The said properties, according to Marcopper, were to be used as substitute security in favor of MR Holdings, Ltd. (ECV/Sunnex)