PALACE: WE WANT NAIA 3 CASE RESOLVED, TOO / NAIA ROW ROILS INVESTORS
[PHOTO - The Office of the Solicitor General is the law firm of the Republic of the Philippines. It is tasked to represent the People of the Philippines, the Philippine Government, its Agencies and Instrumentalities, Officials and Agents (especially before appellate courts) in any litigation or matter requiring the services of a lawyer. It is an independent and autonomous office attached to the Department of Justice for budgetary purposes.WIKIPEDIA.]
MANILA, JANUARY 6, 2011 (STAR) By Aurea Calica - Malacañang assured the German government yesterday of the administration's seriousness in having the issues surrounding the Ninoy Aquino International Airport Terminal 3 resolved soon.
Presidential Communications Development and Strategic Planning Office Secretary Ricky Carandang (photo at left) said the Office of the Solicitor General (OSG) would study all the options available to finally settle the NAIA 3 ownership issue.
"There are different ways by which this issue can be resolved. It can be resolved through direct talks. It can be resolved by going back to arbitration. I'm not sure what the inclination right now of the legal team is," Carandang said in a press briefing.
German Ambassador Christian-Ludwig Weber-Lortsch said his government has also suffered immensely from the controversy because it has an investment in the NAIA 3 project. German firm Fraport AG was part of the consortium that built the facility.
"If we can find a solution to the Fraport issue that is acceptable to everybody then that's all well and good. But then again… Whether or not the financial assistance comes, we want a resolution to the Fraport issue so that's not going to be a factor for us," Carandang said.
Carandang also stressed that "the Fraport issue will be resolved in the interest of the Philippine government and not the German government."
Carandang said it would be up to the OSG to study whether negotiations could take place, considering that Fraport allegedly violated the anti-dummy and other laws in the Philippines to bag the NAIA 3 deal.
Carandang said the OSG would determine which of the two options – direct talks or expropriation proceedings – would best serve the interest of the Philippines.
The German ambassador said the unresolved expropriation case remains the biggest impediment to negotiations. He stressed that the Supreme Court had already ruled that no acts of ownership should be allowed until there was full payment or just compensation by the government to Philippine International Air Terminals Corp. and investors.
"As a way out of this impasse, I am still optimistic that the new administration, in line with its investment priorities, will bring the parties involved to the negotiating table in order to facilitate a legal, fair and timely solution for an inherited problem. It is time to look forward and do away with the ghosts of the past," Weber-Lortsch said.
Sources earlier said the administration was seriously considering negotiations to settle the NAIA 3 issue once and for all, provided that the interests of the government and the people would not be compromised.
The World Bank's International Centre for Settlement of Investment Disputes issued a decision on Dec. 23 allowing Fraport to initiate new proceedings against the Philippine government for just compensation.
In its Dec. 23 decision, ICSID, in effect, reversed its 2007 ruling that Fraport could not make any claim for compensation because it had violated the anti-dummy law in conducting business in the Philippines.
FROM MANILA TIMES Wednesday, 05 January 2011 00:00
'NAIA ROW ROILS INVESTORS'
Terminal 3 expropriation Berlin's 'biggest loss' BY BERNICE CAMILLE V. BAUZON REPORTER
THE biggest stumbling block to attracting German and other European investors to the country is the unsettled dispute over the takeover by Manila of a modern facility at the major airport here, according to Germany's ambassador to the Philippines.
"Unfortunately, the largest impediment to this day [to investments from Europe] remains the unresolved expropriation case of [Ninoy Aquino International Airport Terminal 3 or NAIA 3]. Not only for German but also for European and other international investments," German Ambassador Christian Ludwig Weber-Lortsch said in a statement on Tuesday.
"The German government, through its partial investment guarantee [in connection with NAIA 3], suffered the biggest loss of its kind in the last years," Weber-Lortsch added.
The German ambassador, however, said that he remained "optimistic" that the (Aquino) administration will finally be able to close the book on the controversial $650-million (NAIA 3) to pave way for a healthier investment environment in the country for European business concerns in general.
Weber-Lortsch suggested that the involved parties go back to the negotiating table "in order to facilitate a legal, fair and timely solution for an inherited problem" that is NAIA 3, a project completed during and confiscated by the Arroyo administration.
Fraport AG, the foreign partner of Philippine International Air Terminals Co. Inc. (Piatco), is a German transport company with interests in operations of airports around the world, including Frankfurt International Airport, Cairo International Airport, Indira Gandhi International Airport, Hannover-Langenhagen Airport, Antalya Airport and Xi'an Xianyang International Airport.
Piatco was the consortium contracted to build and operate NAIA 3 before then President Gloria Arroyo ordered the expropriation of NAIA 3 in 2004.
The Arroyo administration nullified the government's contract with Piatco, citing alleged irregularities in the deal, which was sealed during the Estrada administration.
Weber-Lortsch said that since his arrival in Manila in 2007, he has committed himself to "bring business and jobs to the Philippines."
He earlier admitted that the NAIA 3 case has adversely affected relations between Manila and Berlin.
"To this day, no final judgment has been passed on the controversial deal. At the present pace, the legal dispute could continue for years, leaving the urgently needed infrastructure project shelved by lawyers instead of being finished by engineers," the ambassador said in his statement.
"The Philippine Supreme Court clearly stated that no acts of ownership are allowed until full payment of just compensation by the government to Piatco and its investors [is made]," Weber-Lortsch added.
On December 23, 2010, or after three years of consideration, the International Center for Settlement of Investment Disputes (ICSID) in Washington reinstated Fraport's "right to file an arbitration/compensation case against the Philippine government."
The Washington-based ICSID in 2007 ruled that it has no jurisdiction over Fraport's complaint that it was not compensated by the Philippine government after the confiscation of NAIA 3 because the German firm's involvement in the Manila project was not protected under the German-Philippines Investment Guarantee Treaty and that the Anti-Dummy Law was violated.
The Anti-Dummy Law prohibits foreign companies from fully owning a business operating in the Philippines.
Under this law, any corporation or association that operates in the country must be 60-percent owned by Filipino citizens.
Piatco is allegedly wholly owned by Fraport AG with Security Bank and Trust Co., Equitable Banking Corp., Chuah Hup Holdings Co. and Philippine Airport Ground Services, a group of Filipino-Chinese businessmen.
But with the recent ruling of ICSID and the Supreme Court's decision that ordered Manila to fully compensate Piatco and its investors, Weber-Lortsch said that "present operations and tenant agreements on NAIA 3 are considered illegal, as the parties involved including the German government reserve all rights and waive none."
"As a way out of this impasse, I am still optimistic that the new administration, in line with its investment priorities, will bring the parties involved to the negotiating table . . . It is time to look forward and do away with the ghosts of the past," the ambassador added.
NAIA 3 became partly operational for some domestic and international flights in 2008.
The Aquino administration, however, looks forward to wholly operating the terminal this year, saying that the issue is just a matter of how much the government must pay "previous operators."
Lawyer Edwin Lacierda, Malacañang spokesman, had said that the government has won the case, dismissing the recent ICSID ruling.
Lacierda was referring to the decision of the International Chamber of Commerce-International Court of Arbitration in Singapore to make the government the owner of NAIA 3 and to prevent payment of almost $1.1 billion to Piatco.
The government also on Tuesday said the ICSID ruling has no impact on compensation claim by Fraport AG.
Also in a statement, Solicitor General Anselmo Cadiz insisted that the decision was based on a procedural ground.
Cadiz argued that the ruling did not any way find Manila liable for compensation to Fraport AG, the primary investor in the Piatco consortium that built NAIA 3.
"Rather the decision merely provides Fraport AG the opportunity to commence a new arbitration and to present its claims again. Likewise, the Philippine government is entitled to present the evidence against Fraport AG again," he said.
"With the annulment decision, the parties are brought to the situation prior to the filing of Fraport AG's request for arbitration," the Solicitor General explained. WITH REPORT FROM CRIS G. ODRONIA
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