The Philippine Online Chronicles

Malacañang welcomed the Singapore high court’s decision denying Philippine International Air Terminals Co.’s (PIATCO) petition for compensation.

“It’s a victory for the government of the Philippines. It clearly shows the legitimate position of the government and this is not a hometown decision, this is a standard by a foreign court," presidential spokesperson Edwin Lacierda said.

The said decision is the fourth time that a court ruled that PIAT Co and its German partner Fraport committed illegal acts in the construction of the Ninoy Aquino International Airport (NAIA) Terminal 3.

The decision was in response to PIATCO’s request to reverse the International Chamber of Commerce (ICC) tribunal’s ruling last year.

Instead, the high court upheld the tribunal’s decision, adding that the ICC did not misapply the Anti-Dummy law. It denied PIATCO’s claim to $565 million in damages.

Lacierda said the government is hoping that PIATCO will finally put a closure to the case though they are ready to defend the government decision in case of another legal fight.

In 2004, the government took over the operation of NAIA 3 after the Supreme Court ordered the cancellation of the build-operate-and-transfer deal with PIATCO, ruling that PIATCO’s predecessor Paircargo Consortium did not have enough financial capacity at the time that the franchise to operate was awarded to them.

Before taking over PIATCO, the government agreed to pay P3 billion to PIATCO. PIATCO and Fraport sought arbitration through international bodies. But in 2007, the International Centre or Settlement of Investment Disputes (ICSID) decided in favor of the Philippine Government because of supposed Philippine Law violations of Fraport. The decision was later annulled in 2010 because Fraport was allegedly denied the right to be heard. A timeline of the case may be found in ICSID’s website.

PIATCO’s next moves

PIATCO’s vice-president for legal and public affairs Moises S. Tolentino Jr. said they are still studying options “on what to do with this recent setback.”

“As investors, it hopes that the government, and particularly the government of President [Benigno S. C.] Aquino [III], would make good on its daang matuwid [straight path] stance in respect of governance. And in the NAIA-3 case, it only means, for now, the government paying what is truly just compensation,” Tolentino said.

On the other hand, Lacierda said the PIATCO case should not be used to damage the country’s reputation as an investment site.

“I think it’s just a matter of informing them (investors) and clarifying to them that the Piatco contract was entered into under the previous administration,” he said.

At the same time, Manila International Airport Authority (MIAA) General Manager Jose Angel Honrado said NAIA 3 is not yet fully functional because of the incomplete construction. They are hindered from accepting applications from interested airlines not because of the legal battles but because of the infrastructure.

Some airlines that are interested are Cathay Pacific Airways and major US airline Delta Air Lines.