THE Philippine government suffered a legal setback after the Court of Appeals (CA) ruled that it cannot own Ninoy Aquino International Airport Terminal 3 unless it pays the Philippine International Air Terminals Company Inc.’s (PIATCO) P16 billion.
The said amount is currently being held in escrow account as a just compensation.
In a 21-page decision, written by Associate Justice Franchito Diamante, the CA’s special 13th Division ruled that “ the lower court committed grave abuse of discretion after it allowed the government to deposit in escrow account the amount of US$371.43 million or P16 billion and imposing conditions for its release to PIATCO.”
The ruling was promulgated on October 10, 2014 and was concurred by Associate Justices Danton Bueser and Melchor Sadang.
In the CA decision, it granted the petition of PIATCO which reverses the orders made by the Pasay RTC Branch 117 Presiding Judge Eugenio de la Cruz on October 11, 2011.
The omnibus order states that the just compensation amount be placed in escrow and imposed several conditions before the same could be released to petitioner.
The lower court ruling was issued in accordance with the decision dated May 23, 2011 of the Pasay City RTC ordering the government to pay PIATCO just compensation in the amount of US$175.787, 245, less than the proferred value of P3,002,125,000.
“Parenthetically, the omnibus order on October 11, 2011 and an order on December 5, 2011 of the Pasay City RTC, Branch 117 in Civil Case No. 04-0876-CFM for expropriation are hereby nullified and set aside for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction,” the decision reads.
“Accordingly, its ruling that the Republic may exercise full rights of ownership over the
Terminal 3 facilities upon payment of just compensation in an escrow account, is likewise, void,” it pointed out.
The appeals court also pointed out that the issue of just compensation is still the pending before the Supreme Court.
“Hence, the Pasay RTC is incorrect to declare that the government can now exercise full ownership of the airport facilities by mere deposit of just compensation to an escrow account” it added.
The Pasay RTC earlier imposed the following conditions as follows: PIATCO must submit a warranty that the structures and facilities of NAIA III are free from all liens and encumbrances; it must submit an undertaking that it is assuming sole responsibility for any claims from third persons arising from or relating to the design or construction of any structure or facility of NAIA III structures, if any,; and it must submit a duly executed deed transferring the title of the NAIA III structures and facilities to the government, without prejudice to the amount which will finally be awarded to it by the CA.
But the appellate court countered that conditions is onerous and it would be legally impossible for PIATCO to get the just compensation.
The appeals court pointed that “we agree with PIATCO that deposit of just compensation in an escrow account does not constitute ‘payment’ that would extinguish an obligation as contemplated in the Civil code and other relevant laws.”
The CA also ruled that the claim for compensation of Takenaka and Asahikosan Corporations in the amount of US$85.7 million pursuant to the orders of a London tribunal is not binding.
“We take judicial notice of the fact that the respondents-in-intervention’s claim of US$85.7 pursuant to the London orders is not yet binding on Philippine courts as the same is currently pending before the Supreme Court,” it ruled.