In a ruling seen as a strong assertion of judicial power over corporate accountability, the Court of Appeals (CA) has affirmed the legality of freezing up to ₱873.3 million worth of assets of Megaworld Corporation—a rare but powerful legal safeguard granted to construction firm Datem Inc. to secure its monetary claims.
The CA’s Special Second Division dismissed Megaworld’s petition seeking to overturn the Quezon City Regional Trial Court Branch 105’s issuance of a Writ of Preliminary Attachment. The writ authorizes the temporary seizure of a portion of Megaworld’s properties while a larger civil case—over unpaid project receivables—is still pending.
Attachment as a Shield, Not a Sword
Attachment, often viewed as an extreme measure, is a centuries-old legal device designed to prevent debtors from hiding or dissipating assets before a court can render judgment. The appellate court, however, emphasized that in this case, the remedy was both warranted and proportionate.
“Fraud was not just alleged; it was sufficiently demonstrated,” wrote Associate Justice Eduardo S. Ramos Jr., in affirming the lower court’s findings. His decision, concurred in by Associate Justices Ramon M. Bato Jr. and Maximo M. De Leon, stressed that Datem had proven Megaworld’s “false promises” and “willful omission” to fulfill payment obligations, making attachment necessary “to preserve the integrity of eventual relief.”
Pattern of Non-Payment Alleged
Court records revealed that Megaworld and Datem executed a mutual agreement in September 2022 to settle long-standing payables for completed construction projects. Despite formal Certificates of Acceptance and Turnover that made the debts immediately due, Datem claimed Megaworld withheld payments even as it disposed of assets and declared dividends.
This alleged pattern, according to the courts, reflected a fraudulent intent to frustrate collection, enough basis to justify the provisional attachment.
A Signal to the Real Estate Industry
Legal analysts say the decision could ripple across the property and construction sectors, where disputes over project payments are not uncommon. The ruling underscores that large developers are not immune from pre-judgment remedies, especially when contractors can show indications of deceit or bad faith.
“The CA’s affirmation of attachment is both a warning and a precedent,” said one Manila-based legal scholar familiar with commercial litigation. “It tells corporations that the courts will intervene early when there’s evidence of financial evasion, even before a final verdict.”
Corporate Silence
As of press time, Megaworld has not issued a public statement on the decision. Datem, on the other hand, is expected to proceed with enforcing the writ to ensure its claims are secured.
The case, CA-G.R. SP No. 183112, Megaworld Corporation vs. Hon. Rochelle Yvette D. Galano and Datem Inc., not only reaffirms the lower court’s ruling but also reinforces the judiciary’s willingness to use attachment as a protective tool against alleged corporate misconduct.
In the words of one observer, “It’s a reminder that in Philippine business law, contracts may be written in fine print, but accountability is written in bold.”