PALACE LOSES NAIA 3 ARBITRATION CASE BUT INSISTS IT STILL OWNS AIRPORT
[PHOTO - NAIA 3 TERMINAL]
MANILA, JANUARY 4, 2011 (BULLETIN) By GENALYN D. KABILING – The Philippine government still owns and operates the Ninoy Aquino International Airport (NAIA) Terminal 3 despite losing an arbitration case in Washington DC, Malacañang said Monday.
Presidential Spokesman Edwin Lacierda said the decision of an Ad Hoc Committee in Washington which reportedly cleared the airport builders of charges of violating the antidummy law was "more procedural than substantive."
Lacierda, speaking to Palace reporters, said the government ownership of NAIA-3 is bolstered by a ruling of the International Chamber of Commerce-International Court of Arbitration in Singapore, favoring the government in the arbitration case against the airport builders.
"Remember that the Singapore decision has not been reversed. We received a legal victory in Singapore so it does not affect our right to possess and operate NAIA-3," he added.
Reports claimed that the Ad Hoc Committee in Washington has nullified the findings of the International Center for Settlement of Investment Disputes (ICSID) that the airport builders violated the anti-dummy law.
Lacierda, however, insisted that the government will continue to run the pass the modern terminal following the favorable ruling from the Singapore court. The Singapore decision prevented the government from paying nearly $1.1 billion to the complainants.
"There is a Singapore decision and Piatco (Philippine International Air Terminals Co.) was the complainant in that Singapore decision," he said.
"We've won already so it's just an issue of how much are we suppose to compensate the operators, the previous operators," he added.
Meantime, Lacierda said the government is still studying when the NAIA-3 will be fully operational amid ongoing repairs of the terminal. At present, the controversial terminal is limited to some operations of international and domestic flights.
"There are problems in maintenance. These are being fixed. In fact, we're in the process of repairing some of the areas which were found to be defective," he said.
He said the timetable of the full operations of NAIA 3 will be disclosed by Transportation Secretary Jose de Jesus.
The government seized the terminal in 2004 following a Supreme Court decision voiding the Piatco contract to build and operate the terminal. The investors went to the World Bank to recover the hundreds of millions of dollars that it reportedly invested in the airport.
In 2008, the airport terminal was partially opened.
PHOTONEWS REPORT FROM THE DAILY TRIBUNE
Misimpressions: Noy defiant, won't return NAIA 3 to owners By Aytch S. de la Cruz 01/04/2011
The Aquino government has no plans to give back to the owners and operators of the controversial Ninoy Aquino International Airport Terminal 3 (NAIA-3) its facilities, thus defying the final decision handed out by an Ad Hoc Committee in Washington which case was lost by the Philippine government and its foreign and local lawyers.
President Aquino, in a text message sent to the Tribune, called the information contained in the Tribune report as "misimpressions," including the assertion that the lawyers who represented the government in this case had misused the $50-million amount paid to them for their legal services, but had the matter referred to Executive Secretary Paquito Ochoa Jr.
But a source from Philippine International Air Terminal Co. (Piatco) said it is the President who appears to suffer from "misimpressions" and challenged Malacañang to check on the
Commission on Audit's (CoA) records where it will definitely show that the Manila International Airport Authority (MIAA) funded the $50 million legal fees, which were in turn received by the government lawyers, among whom were retired Justice Florentino Feliciano and then lawyer Lourdes Sereno, now an associate justice who was rewarded with the high court post by Aquino who claimed it was she who had won in the Piatco ICC case against government.
"That ($50 million legal fees) is fact and can be verified. Malacañang should have the books opened, to see just who is misrepresenting facts," he said.
Also, speaking at a news conference held in Malacañang yesterday, presidential spokesman Edwin Lacierda claimed that the legal battles pertinent to this issue have been over since the International Chamber of Commerce (ICC) based in Singapore decided in late July last year that the government had won the arbitration case filed by Piatco, adding that the government has already won in the ICC Singapore case and that the ICCC ruling stated that the Philippine government can operate and exercise ownership rights, which the spokesman said will be fully exercised and implemented sometime this year.
A Piatco board director, who asked not to be named, told the Tribune when asked to react on the presidential spokesman's comments, yesterday that Lacierda is guilty of deliberately twisting facts, pointing out that first, the petition filed by Piatco before the ICC, was a plea to validate the Piatco contract with the government and that this motion was denied by the ICC, on grounds that this specific Piatco petition cannot be acted upon by the ICC since there were still many aspects that have to be determined first.
"There is nothing in that ICC ruling that says the (Philippine) government can take over the operations and exercise ownership rights when it denied Piatco's petition to validate the contract.
The government can exercise operating and ownership rights if and when it pays us just compensation for expropriating the property. Even the Supreme Court has already ruled that the government cannot exercise ownership without paying Piatco its rightful claim to compensation—which government has not paid for until now," the source said, adding that Lacierda is into making false claims again.
Reacting to the Washington based ad hoc committee ruling, both Lacierda and Presidential Communications Development and Strategic Planning (PCDSP) Secretary Ricky Carandang argued that the Singapore decision has more weight compared to the verdict drawn by the Ad Hoc Committee.
"It (Washington Ad Hoc Committee's decision) will not affect our right of possession of NAIA-3. Remember that the Singapore decision has not been reversed. We received a legal victory in Singapore so it does not affect our right to possess and operate NAIA-3," insisted Lacierda.
"There were two international arbitrations and, again, they (Washington Ad Hoc Committee) are ruling on different aspects of the same case and one ruling does not necessarily contradict or contravene the other. So as we understand it, again we have not seen the documents on the World Bank ruling, (but) that should not have any significant impact on the rulings in Singapore and it should not lead to any delay in the expropriation and re-opening of NAIA 3," Carandang explained, for his part, in a chance interview.
Neither Lacierda nor Carandang mentioned the fact that even the Supreme Court had banned government from exercising ownership rights without due compensation.
The Piatco director stressed that the Palace is in violation of the SC ruling and should be cited for contempt, and dared the Palace to show the public just where in the ICC ruling does it say that the government can operate and exercise ownership rights and not paying any compensation to Piatco.
In his text , Aquino said: "May I refer you to the Executive Secretary who can correct your mis-impressions," ( in the Tribune report) Aquino said.
Ochoa, in a text message to the Tribune reporter, on the feeback on the NAIA-3 issue, said that he will check on the details (today) but offhand, I don't think that (report) is accurate. The (Washington ad hoc) decision merely overturned the previous decision that was favorable to the Philippine government. Ochoa said, adding that the issue on payment was not resolved.
The earlier ICSID decision merely stated that the body has no jurisdiction over the case and Malacañang then immediately crowed that it had won the case against Fraport.
In much the same way, the Piatco petition at the ICC Singapore that concerned the motion to rule the Piatco contract valid, and nothing else, was immediately propagandized by Aquino spokesmen as their having won the case Piatco had filed against the government, and even claimed that the ICC granted the Aquino government the right to operate the airport facility and exercise ownership.
On the issue of the $50 million legal fees, Ochoa said in his text message that he is unaware of this payment and that it would be better for Tribune to ask the Solicitor-General as he would be in a better position to answer these questions.
Sources, according to the report, claimed that Justices Feliciano and Lourdes Sereno who handled the case for the governmen along with American lawyers, may even be held liable for plunder due to their alleged "lavish" spending while working on the case abroad which included traveling in first class carriers, staying at five-star hotels, and dining at posh restaurants, among other things.
"Calls were already made for President Noynoy to investigate and stop these anomalous transactions of the government lawyers, but again, these calls were unheeded. In fact, he (Aquino) even rewarded (Justice) Sereno with a posting in the high court, as an associate justice, even praising her for her winning the case against Piatco and its partner," the source was quoted as saying in the report.
Malacañang paid no attention to these disclosures with Lacierda even announcing that the government is actually on its way to make the NAIA-3 fully operational within the year—a statement that was echoed by Carandang.
"We want to see it (NAIA-3) open within this year but it's difficult to pin down the exact date because there are many things that need to be ironed out yet. But with the major rulings in our favor then we can expect some confidence and, again, as Secretary Lacierda said, we're hopeful that it can be opened within this year—whether it's beginning of the year, middle of the year, end of the year—it's difficult to say," Carandang said.
Lacierda said the expected full operation of the NAIA-3 will be handled by Transportation and Communications Secretary Jose de Jesus but such plan is still subject to further studies owing to the maintenance problems of the airport facility.
"We're in the process of repairing some of the areas which were found to be defective so that is being done right now. So as to the timetable, we'll have to ask Secretary Ping de Jesus on that," Lacierda said.
The Palace official further indicated that this particular issue that has been running for approximately 10 years now would not have any impact on the investor confidence that the Aquino administration is trying to invite through its public-private partnership programs.
"We've won already so it's just an issue of how much are we supposed to compensate the operators, the previous operators," Lacierda said but he did not elaborate whether the government would indeed give the compensation due the complaining private firms.
Days after Malacañang lauded the government lawyers for their alleged triumph in the arbitration case at the ICC, reports circulated early August last year that officials from the Aquino administration immediately considered engaging in an out-of-court settlement with Piatco on the issue of compensation but this was denied by Lacierda.
De Jesus had earlier listed projects supposedly to fast-track the full operation of NAIA-3 at a lower total cost of civil works and equipment citing government negotiations with Japanese contractor Takenaka to complete the unfinished work at the NAIA 3. Takenaka is the Japanese contractor of the NAIA 3.
In 2007, the Washington-based ICSID ruled that it had no jurisdiction over the case filed by Fraport AG, Piatco's German partner. NAIA 3 opened in 2008 after six years of being idle caused by a clash among the parties that put up the facility.
The airport terminal was an unsolicited build-operate-transfer project undertaken by Asian Emerging Dragon Corp., a group of Chinese magnates, in 1994, before being awarded to the Piatco-Fraport consortium.
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