It's final: Phl gov't wins NAIA-3 case in Singapore

By Rudy Santos | Philstar 

After nine years, the arbitration case between the Philippine government and the Philippine International Air Terminals Co. (Piatco) is finally over.

Manila International Airport Authority (MIAA) general manager Jose Angel Honrado yesterday announced that the Singapore-based International Chamber of Commerce’s (ICC) ruling in favor of the Philippine government has become final and executory.

In a manifestation filed on Dec. 27, 2011, Piatco formally withdrew its second application to set aside the earlier ICC ruling that dismissed its claims against the Philippine government.

Piatco in February 2003 filed a request for arbitration before the ICC seeking to enforce its concession agreement with the Philippine government for the construction of Ninoy Aquino International Airport Terminal 3 (NAIA-3).

The agreement authorized Piatco to build the $650-million NAIA-3 and granted a franchise to operate and maintain the terminal during the concession period of 25 years.

But the Supreme Court (SC) declared the agreement null and void for having been “amended and re-stated” without the approval of the National Economic and Development Authority (NEDA), Honrado said.

The SC said that Paircargo Consortium, the predecessor of Piatco, did not possess the requisite financial capacity when it was awarded the NAIA-3 contract and that the agreement was contrary to public policy.

Piatco sued the government before the ICC in Singapore where it sought to recover at least $565 million in damages.

Its foreign investor, Fraport, separately sued the Philippine government at the International Center for the Settlement of Investment Disputes (ICSID) in Washington.

In August 2007, the ICSID affirmed the SC’s nullification of the concessions and rejected Fraport’s claim because of its violation of the Anti-Dummy Law.

The ICC also rejected Piatco’s claim because of illegality arising from Piatco’s violation of the Anti-Dummy Law, which requires that the operation, management and control of public utilities such as the airport should remain with Filipinos.

With Piatco’s withdrawal, Honrado said the ICC award granting the Philippine government more than $6 million in arbitration cost has become final.

“This final ICC ruling, coupled with payment of just compensation in the expropriation case decided in our favor by the Regional Trial Court of Pasay City, will pave the way for the full commercial operations of the NAIA Terminal 3,” Honrado announced.  (Philstar News Service, www.philstar.com)

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