GNPOWER MARIVELES ENERGY CENTER LTD. CO. (formerly GNPower Mariveles Coal Plant Ltd. Co.) v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COU RT O F TAX APPEALS Quezon City SECOND DIVISION GNPOWER MARIVELES CTA CASE NO. IOJ12 ENERGY CENTER LTD. CO. Members: CASTANEDA, JR., Chairperson, (formerly GNPOWER BACORRO-VILLENA, and CUI-DAVID,J1. MARIVELES COAL P LANT LTD. CO.), Petitioner, -versus- COMMISSIONER OF INTERNAL REVENUE, Promulgated: FEB 09 2022 / ~~S~~~~~~t~ 7j,;i;.~ ~ X - - - - - - - - - - - --------------- ---} X JUDGMENT BASED ON COMPROMISE AGREEMENT BACORRO-VILLENA, L: In a Resolution dated 27 July 2021, the Court required the parties to submit as proof of their compromise agreement the originals or certified true copies of the following: 1. Secretary's Certificate authorizing Mark Gil C. Carifio (Carino) to enter into a compromise on behalf of petitioner; and, 2. Certificate of Availment (CA) showing the approval of the National Evaluation Board (NEBY

JUDGMENT BASED ON COMPROMISE AGREEMENT CTA Case No, .lli.3.1Z. GNPOWER MARIVELES ENERGY CENTER LTD, CO, v, CIR Page2 of6 X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X Along with their Judicial Compromise Agreement (JCA), the parties also filed their "Joint Motion for Judgment Based on the Judicial Compromise Agreement dated 30 June 2021" on 13 July 2021, On 29 November 2021, the parties filed their "Joint Compliance" submitting the following documents: L Original Secretary's Certificate authorizing Carino to sign the JCA on behalf of petitioner; and, 2, Certified copy of the CA with the approval of the NEB's members, The JCA reads in part: WHEREAS, the PARTIES, for the purpose of avoiding and putting an end to a protracted, expensive and mutually prejudicial litigation, have agreed to amicably settle the above-mentioned case, upon terms and conditions hereinafter set forth; NOW, THEREFORE, for and in consideration of the foregoing premises, the PARTIES hereto have agreed as follows: Section 1. Judicial Compromise Amount. In order to settle the above-mentioned case, the TAXPAYER has offered and the BIR has accepted the total payment of 1'7s,o8o,346.62 ("Judicial Compromise Amount"), The Judicial Compromise Amount has already been paid via electronic filing and payment system (eFPs) on June 30, 2021. Section 2. Submission to the Honorable CTA. This Agreement fully signed by the PARTIES shall be submitted for the approval by the Honorable CTA in CTA Case No, 10312, The PARTIES undertake to perform any and all acts, and submit any and all documents required by the Honorable CTA to be able to render a Judgment by Compromise Agreement in the said case, Section 3� Effectivity of the Agreement. This Agreement shall take effect and bind the PARTIES upon approval by the Honorable CTA. This Agreement shall thereafter remain in force and effect until completion and fulfillment of the covenants and undertaking of the PARTIES hereto, rry Section 4� Deliverables of the PARTIES upon approval of , this Agreement by the Honorable CTA. Upon final approval

JUDGMENT BASED ON COMPROMISE AGREEMENT CTA ,Case No. 1JUll GNPOWER MARIVELES ENERGY CENTER LTD. CO. v. CIR X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X the Honorable CTA of this Agreement, the BlR undertakes to execute and deliver to the TAXPAYER any and all documents as may be required to effectively and fully implement the provisions of this Agreement, withdrawing and cancelling the FLD, and lifting the WDL. Section 5� Authority to Enter Compromise Agreement. The BIR, through Commissioner Caesar R. Dulay warrants that he has the necessary authority and capacity under the law to enter, sign, and execute this Agreement, and to deliver its implementing documents upon its approval by the Honorable CTA. The TAXPAYER warrants that Mark Gil C. Carino is duly authorized by the General Partners of the TAXPAYER, through its Management Committee, and has full legal capacity to enter, sign, and execute this Agreement, and to deliver payment of the above- agreed additional amount. Section 6. Full and Final Settlement. This Agreement is executed by the PARTIES for the purpose of amicably settling and ending CTA Case No. 10312. Upon approval by the Honorable CTA, the BIR recognizes the full satisfaction of the supposed tax liability of the TAXPAYER in connection with CTA Case No. 10312. The BIR acknowledges that the TAXPAYER no longer has any tax liability whatsoever based upon, arising from, or in connection with the particular subject of CTA Case No. 10312. Section 7� Disapproval of this Agreement by the Honorable CTA. In the event that this Agreement is disapproved by the Honorable CTA, the PARTIES agree to a curing period of sixty (6o) days from receipt of the Order/Resolution disapproving this Agreement. During such curing period, the PARTIES mutually agree to perform any and all acts necessary to rectify or correct the deficiency, defect or imperfection which caused its disapproval, and re-submit the rectified or corrected Agreement for approval by the Honorable CTA. However, in case the deficiency, defect or imperfection is not or cannot be rectified or corrected within the said curing period, or still not approved by the Honorable CTA after it is rectified or corrected by the PARTIES: 1. The amount already paid by the TAXPAYER to the BIR shall be deemed a tax credit which may be applied against internal revenue taxes for which the TAXPAYER may be directly liable, as allowed under existing rules and regulations; and 2. The proceedings of CTA Case No. 10312 shall continue and the discussions pursuant to the disapproved Agreement cannot be used by the PARTIES in said 12roceeding unless consent of the other party be obtaine/

JUDGMENT BASED ON COMPROMISE AGREEMENT CTACase No.l..!lJ.ll GNPOWER MARIVELES ENERGY CENTER LTD. CO. v. CIR Page 4of6 x x~-------------------------------------------- Section 8. No Admission of Liability. The execution of this Agreement shall not constitute or be interpreted in any way as an admission or acknowledgement of error or liability by the PARTIES. Section 9� Non-performance. The PARTIES agree that the failure of any party to comply with any of the terms and conditions of this Agreement shall entitle the aggrieved party to file an appropriate motion with the Honorable CTA for the immediate implementation and execution of the terms and conditions of this Agreement or the judgment or order of the Honorable CTA approving the same. Section 10. Signatures and Counterparts. This Agreement may be signed in counterparts, each of which when executed and delivered shall constitute a duplicate original, but all of which shall be taken together as a single instrument. Until and unless each party has received a counterpart hereof signed by the other party hereto, the Agreement shall have no effect and no party shall have any right or obligation hereunder.' Under the Civil Code2 and the Rules of Court3, as amended, courts are directed to persuade litigants in civil cases to agree upon some fair compromise. Such agreement has the force of law and is conclusive between the parties.4 A compromise agreement is a contract whereby the parties make reciprocal concessions in order to resolve their differences and, thus, avoid or put an end to a lawsuit. They adjust their difficulties in the manner they have agreed upon, disregarding the possible gain in litigation and keeping in mind that such gain is balanced by the danger of losing. It must not be contrary to law, morals, good customs and public policy, and must have been freely and intelligently executed by and between the parties. A compromise agreement may be executed in and out of court. Once a compromise agreement is given judici~ Judicial Compromise Agreement, Division Docket, Volume VI, pp. 2757-2762. Article 2029. The court shall endeavor to persuade the litigants in a civil case to agree upon some fair compromise. RULE IS PRE-TRIAL Section 2. Nature and Purpose. - The pre-trial is mandatory and should be terminated promptly. The court shall consider: (a) The possibility of an amicable settlement or of a submission to alternative modes of dispute resolution(.] 4 Maria Sheila Almira T. Viesca v. David Gilinsky, G.R. No. 171698, 04 July 2007.

JUDGMENT BASED ON COMPROMISE AGREEMENT CTA Case No. .lllJ.12. GNPOWER MARIVELES ENERGY CENTER LTD. CO. v. CIR Page 5 of6 X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X approval, however, it becomes more than a contract binding upon the parties. Having been sanctioned by the court, it is entered as a determination of a controversy and has the force and effect of a judgment.5 After a careful scrutiny of the documents submitted by the parties in support of their JCA, the Court finds the same in order and in compliance with the established laws, rules and regulations. WHEREFORE, in view of the foregoing, the parties' Joint Motion for Judgment Based on the Judicial Compromise Agreement dated 30 June 2021 filed on 13 July 2021 is hereby GRANTED. Consequently, the Judicial Compromise Agreement is APPROVED and the same shall thus constitute as the Court's judgment in herein case. Impressed thus with judicial imprimatur, the parties are ENJOINED to faithfully comply with all the terms and conditions of the aforesaid Judicial Compromise Agreement. SO ORDERED. ~ LENA WE CONCUR: 0.--<i-od~ c. a.Y-.-&01.., <2 JuANITO C. CASTANEDA;'Jk... Associate Justice INHIBITED LANEE S. CUI-DAVID Associate Justice David M David v. Federico M Paragas. Jr., G.R. No. 176973, 25 February 2015; Citations omitted.

JUDGMENT BASED ON COMPROMISE AGREEMENT CTA.Case No.l!!lll GNPOWER MARIVELES ENERGY CENTER LTD. CO. v. CIR Page 6 of6 X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X ATTESTATION I attest that the conclusions in the above Judgment Based on Compromise Agreement were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. f~Ua.A.N..I.T.cO<kC:C. :C.AQS.T.YA-N~EcD,j:(.,~SR2.. Associate Justice 2nd Division Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Judgment Based on Compromise Agreement were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. Presiding Justice