THE Philippine International Air Terminals Co. Inc. (Piatco) has asked the Court of Appeals (CA) to reconsider its decision ordering the project company to pay the government $6 million, or almost P300 million, representing the cost of the arbitration proceedings before the International Chamber of Commerce International Court of Arbitration.
In its 48-page motion for reconsideration, Piatco asked the CA to reverse its earlier ruling, because of the alleged patent violation of Philippine laws and public policy committed by the government.
Piatco assailed the payment of attorneys’ fees to the lawyers hired by the Department of Transportation (DOTr) and the Manila International airport authority (Miaa) amounting to $6,009,351.66.
“To rule in favor of the GRP would result to grave injustice on the part of Piatco. Surely, this honorable court is not a court of mere convenience but a court of law and equity,” the motion read.
In the ruling penned by Associate Justice Marlene Gonzales-Sison, dated January 20, 2017, which was concurred by Justices Ramon Cruz and Henry Jean Paul Inting, it granted the plea of the Office of the Solicitor General for the payment of the legal fees for all the legal counsels hired by the Philippine government.
The appellate court set aside the ruling issued by the Regional Trial Court in Mandaluyong City, Branch 213 on August 29, 2014, and May 4, 2015, which held that the final award is not enforceable under Philippine law for being contrary to public policy.
The lower court ruled that the country’s procurement law was violated when the government tapped foreign counsels and legal consultants without conducting a public bidding.
In reversing the lower court’s ruling, the CA granted the petition for review filed by the DOTC and Miaa seeking to nullify the decision issued by the RTC Mandaluyong. The CA held that no public policy was violated when the government is the one receiving money duly awarded by an arbitral tribunal.
“Assuming arguendo that the government violated all the pertinent laws regarding public bidding, procurement and disbursement, will the recovery of the government of $6,009,351.66 result in any injury to the public or is against the public good? We answer in the negative. Definitely, any amount that goes to the government coffers is not detrimental, but on the contrary, beneficial to the public,” the CA ruled.
“There may be public policy against unlawful and unnecessary expenditure, but there is no public policy that prohibits the recovery of that expenditure by the government,” it added.
The CA explained Piatco’s opposition against the government’s claim was geared toward preventing the government from wasting public money.
However, the CA noted by the time the government filed a petition with the trial court seeking the enforcement of the Arbitral Tribunal award, cost and expenses were already incurred.
The appellate court also gave weight to the fact that both the government and Piatco agreed the losing party in the arbitration proceedings should pay the cost incurred by the winning party.
It can be recalled that in April last year, the Supreme Court affirmed its decision directing the government to compensate Piatco for the expropriation of Ninoy Aquino International Airport Terminal 3 (Naia 3) in the amount of more than $510 million as of December 2014.
The Court denied Piatco’s partial motion for reconsideration seeking an additional compensation in the amount of $107 million from the government.
However, it partly granted the motion for reconsideration filed by the government by declaring that the full ownership over the Naia 3 will be transferred to the government upon full payment of the just compensation.
The Court has fixed the principal amount of just compensation at $326,932,221.26 as of December 21, 2004.
It added that the amount of $267,493,617.26, which is the difference between $326,932,221.26 and the proffered value of $59,438,604.00, shall earn a
straight interest of 12 percent per annum from September 11, 2006 until June 30, 2013, and a straight interest of 6 percent per annum from July 1, 2013 until full payment. Based on the Court’s computation, the total interest from September 11, 2006 to December 2014 amounted to $242,810,918.