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PHL wins again as Singapore High Court dismisses PIATCO claim

The Singapore High Court denied on Tuesday the petition of Philippine International Air Terminals Co. (PIATCO) to set aside the award rendered by an international arbitration tribunal, thus affirming the annulment of concession agreements concerning the Ninoy Aquino International Airport Terminal 3 (NAIA-3) and the order against PIATCO to pay the costs of the proceeding. The High Court’s dismissal of PIATCO’s claim is the fourth time that domestic and international tribunals have ruled that PIATCO and Fraport committed illegal acts in the NAIA-3 project. PIATCO had asked the High Court to reverse the award rendered by the International Chamber of Commerce (ICC) tribunal on July 22, 2010, involving the airport terminal. The Singapore High Court upheld the ICC tribunal dismissal of PIATCO’s claims on the ground of illegality and upon observing due process at arriving at this decision. The High Court was not convinced that the ICC tribunal misapplied the Anti-Dummy law, nor that PIATCO had been deprived of the right to be heard because case records showed that PIATCO had fully argued its case before the arbitral tribunal. The dismissal of PIATCO’s application is expected to pave the way for the Philippine government’s rehabilitation and operation of the terminal. The government had expropriated the facility in 2005. Last May, the government was ordered to pay PIATCO $176 million as “just compensation," an amount much less than the P3 billion that was earlier proffered as the value of the expropriated facility. The government has since offered to deposit the money in escrow as payment of just compensation but PIATCO appealed the decision. Previous rulings favor PHL In 2003, the Philippine Supreme Court nullified PIATCO’s build, operate and transfer contract over the airport terminal for violation of bidding rules and other laws, and for modifying the contracts to the disadvantage of the Philippine government. PIATCO then sued the Philippine government before the ICC tribunal, seeking to recover at least $565 million in damages. On the other hand, PIATCO’s foreign investor, the German firm Fraport, separately sued the Philippine government at the International Center for the Settlement of Investment Disputes (ICSID) in Washington D.C. In August 2007, the ICSID affirmed the Philippine Supreme Court’s nullification of the concessions and rejected Fraport’s claim because of its violation of the Anti-Dummy Law. In July 2010, the ICC tribunal rendered an award also rejecting PIATCO’s claim because PIATCO had violated the Anti-Dummy Law which requires that the operation, management and control of public utilities such as the NAIA-3 should remain with Filipinos. The ICC tribunal back then had found that PIATCO had illegally conspired to have Fraport take control the public utility through secret shareholder agreements and loans. In its final award last May, the ICC tribunal further ordered PIATCO to pay the Philippine government more than $6 million in costs. PIATCO has since applied to the Singapore High Court also to annul the ICC tribunal award on costs. — ELR/VS, GMA News
Tags: naia3, piatco, fraport