The Philippine government has appealed a ruling of the Supreme Court (SC) ordering it to pay $510 million by way of just compensation to the consortium Philippine International Air Terminals Company Inc. (Piatco) for the expropriation of Ninoy Aquino International Airport Terminal 3.
According to the lawyer for the government, the Office of the Solicitor General (OSG), Piatco is not entitled to receive such amount for it has committed misdeeds.
In the SC ruling last September 9 via en banc unanimous decision, penned by Associate Justice Arturo Brion, the SC has set the amount of just compensation at $267,493,617.26 as of December 2004 plus annual interest of 12 percent from September 2006 and another annual interest of six percent from July 2013 until full payment.
This amount has escalated from the original ruling of the Regional Trial Court (RTC) and the Court of Appeals (CA).
In the CA decision, it ordered the Philippine government to pay over $371 million to the consortium.
The appellate court modified the 2011 ruling of the Pasay City RTC Branch 117 awarding just compensation to Piatco in the amount of $ 175.79 million, still less the over P3 billion or $59.44 million already paid to Piatco in compliance with an SC ruling in 2004 that it had to be paid first for building the terminal before its actual takeover could proceed.
In a 28-page motion for reconsideration, however, the OSG, represented by Solicitor General Florin Hilbay asked the High Court to delete the award of interests to Piatco in the amount of $242,810,918.54.
The SC was also asked to deduct the amount of $113,944,044, representing non-compliance with contract specifications by the consortium, from the principal amount of compensation due.
With this, the OSG pleaded that the amount of just compensation must only be pegged at $163,959,441 less the proffered value of $59,438,604 already paid to Piatco.
“This is not an expropriation of land, but of a depreciating improvement on land. Thus, in fixing just compensation, the Honorable Court must take into account the fact that the government is taking property that is losing value over time,” it was pointed out.
The OSG said imposing 12-percent interest would be tantamount to allowing the consortium to profit from its own misdeeds.
“If Piatco had not violated the laws, the government would have had a guaranteed return of P17.75 billion and the public would not have been severely inconvenienced for more than 10 years with an unfinished airport,” the pleading stated.
Among the claimants were Fraport, an equity investor of Piatco for the Terminal 3 project; and Takenaka and Asahikosan, the sub-contractors that actually built the project.
Hilbay pointed out that while the government is willing to pay Piatco, the SC must not overlook that there are other claimants who are interested in a portion of just compensation.
Fraport had filed charges against the Philippine government before an international arbitral tribunal.
On the other hand, a suit between the consortium and contractors Takenaka and Asahikosan is pending before the SC.
“To ensure fairness to the Republic, the Honorable Court should declare that the government is released from any contingent claims against [the Terminal 3 project]once just compensation is paid… This also ensures that public funds will not be spent beyond what the Honorable Court has fixed as compensation due,” it argued.
Hence, the government sought “just compensation [that]should be equivalent to a clean title.”