THE government has lost its bid before the Court of Appeals (CA) to compel the Philippine International Air Terminals Co. Inc. (Piatco) to pay the amount of $6 million, or more than P300 million, representing the cost of the arbitration proceedings before the International Chamber of Commerce International Court of Arbitration.
In a three-page resolution penned by Associate Justice Ramon M. Bato Jr., the CA’s Former Special Eleventh Division held that the government, through the Office of the Solicitor General (OSG), failed to raise new arguments that would warrant the reversal of its June 4, 2018 amended decision.
The appellate court, in its amended decision, reversed its order for Piatco to pay the government $6 million in arbitration costs for the legal dispute involving the contracts for the construction and development of the Ninoy Aquino International Airport (Naia) Terminal 3.
It held that the government violated the fundamental public policy in the hiring of “expert witnesses” or “consultants,” or local or foreign lawyers or law firm, when the OSG did not follow the provisions of RA 9184 (Government Procurement Reform Act) and its implementing rules and regulations.
Ousted Chief Justice Maria Lourdes A. Sereno was one of the lawyers hired to represent the government in the arbitration case from 2004 to 2009.
“After a painstaking evaluation of the motion for reconsideration dated June 28, 2018 filed by the Office of the Solicitor General…, considering that the arguments proferred by the OSG are a mere rehash of the arguments evaluated and directly resolved by the court when we rendered the assailed amended decision promulgated on June 4, 2018, finding no cogent or compelling reasons to reconsider the assailed amended decision, the motion for reconsideration is denied for lack of merit,” the CA ruled.
Concurring in the ruling were Associate Justices Rodil Zalameda and Samuel Gaerlan.
In rejecting the claim of the government, Piatco insisted that the Philippine government violated the country’s procurement law when the government tapped foreign counsel and legal consultants without conducting a public bidding.
Piatco assailed the payment of attorneys’ fees to the lawyers hired by the Department of Transportation and the Manila International Airport Authority amounting to $6,009,351.66.
“To rule in favor of the GRP would result [in] 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,” it argued.
In the ruling penned by Associate Justice Marlene Gonzales-Sison, dated January 20, 2017, and concurred in by Justices Ramon Cruz and Henry Jean Paul Inting, the court granted the plea of the OSG for the payment of the legal fees for all the legal counsel hired by the Philippine government.
However, acting on Piatco’s motion for reconsideration, the CA amended its decision on June 4, 2018, saying the OSG should have first sought the approval of the Commission on Audit (COA) before hiring and paying the lawyers and consultants.
The CA also said it didn’t go through the proper procurement process.
In April 2017 the Supreme Court affirmed its decision directing the government to compensate Piatco for the expropriation of Naia Terminal 3 in the amount of more than $510 million as of December 2014.
The SC 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.