THE Court of Appeals has compelled the Philippine International Air Terminals Company Inc., builder of the Ninoy Aquino International Airport Terminal 3, to immediately pay the government the amount of $6 million or almost P300 million representing costs of the arbitration proceedings before the International Chamber of Commerce International Court of Arbitration.
In a 23-page decision, the CA’s Seventeen Division through Associate Justice Marlene Gonzales Sison reversed and set aside the ruling issued by the Regional Trial Court of Mandaluyong City, Branch 213, on Aug. 29, 2014 and May 4, 2015, which held the final award was not enforceable under the Philippine law for being contrary to public policy.
The RTC ruled the country’s procurement law was violated when the government engaged foreign counsels and legal consultants without conducting a public bidding.
In ruling against Piatco, the appellate court granted the petition for review filed by the Department of Transportation and Communications and the Manila International Airport Authority seeking to nullify the decision issued by the Mandaluyong RTC.
The CA ruled no public policy was violated when the government was the one receiving money duly awarded by an Arbitral Tribunal.
“Assuming arguendo [for the sake of argument] 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 appellate court stressed.
“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 said.
The CA pointed out that Piatco’s opposition against the government’s claim was geared towards preventing the government from wasting public money.
However, it noted that 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 by it.
“The trial court, with its limited jurisdiction, cannot stop a previous action of the government. At least in this case, the past cannot be remade. What has been done cannot be undone. These are the verities the parties cannot debate,” the CA said.
The appeals court court also gave weight to the fact that both the government and Piatco agreed that the losing party in the arbitration proceedings should pay the cost incurred by the winning party.
“Having [been] adjudged as the losing party, Piatco cannot escape its liability towards the government by invoking a frivolous defense of ‘contrary to public policy’,” the CA said.
The appellate court said the Office of the Solicitor General which represented the government in the Arbitral Tribunal wass given a leeway in hiring co-counsels to defend the interest of the government abroad.
The CA also did not give merit to the claim of Piatco that its obligation had been extinguished by virtue of legal compensation considering that the government still owed it P293.5 million representing its annual guaranteed payments which were never returned by the government.
The appellate court said Piatco’s claim was just a claim since no court had ever ruled that indeed the government owed the former such amount.
“Even if it is proven that there is such a debt, no judgment has been rendered to qualify it as due and demandable,” it stressed.
Associate Justices Ramon Cruz and Henri Jean Paul Inting concurred with the ruling.
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 in the amount of more than $510 million as of December 2014.
The highc ourt 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-IPT III would be transferred to the government upon full payment of the just compensation.
The SC has fixed the principal amount of just compensation at $326,932,221.26 as of Dec. 21, 2004.
It added 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 Sept. 11, 2006 until June 30, 2013, and a straight interest of 6 percent per annum from July 1, 2013 until full payment.
The high tribunal has computed the total interest from Sept. 11, 2006 to Dec. 2014 which amounted to $242,810,918.