SC ruling in Piatco upholds long-standing doctrine

The Supreme Court ruling that the Piatco contract was null and void saved Philippine jurisprudence and kept a long standing doctrine that third parties or complete corporate strangers cannot revoke existing and valid business contracts.

Perfecto Yasay Jr., chairman of MIAA-NAIA Association of Service Operators, said a different decision would have thrown the country’s legal precedents awry and created a nightmare scenario where existing legitimate claims could be ignored.

He said it was "a contract of the worst of kind and people should go to jail if the whole message and spirit of the court ruling were to fully served both to mete out penalties and deter future Piatcos."

"Our existing contracts with airport authorities to service Terminals 1 and 2 were to be revoked under the contract with Piatco, a third party and a non-party as far as we are concerned. It is like the business contract between Jose and Pedro to service a garage was given to Juan simply because Juan was building a new garage in the compound," he said.

The companies’ contracts to service Terminals 1 and 2 were to be revoked by the Piatco contract once Terminal 3 became operational. Yasay said renewal was iffy at best since Piatco – which was given control over various airport services, including some regulatrory functions of the government – had to give its approval before any of these companies could operate again at the airport and compete with Piatco.

"Piatco was primed to be a monopoly at the airport. We have been operating there for decades and all of a sudden, we would be banned from it because Piatco was to take over. What about the sanctity of our contracts?" Yasay asked.

"The court ruling," he said, "sent a powerful message to local and foreign businessmen to take the straight path in doing business here. The Chengs and Fraport of German (Piatco’s main shareholders) had it coming to them."

Fraport, he said, was part of the whole deal to "squeeze blood from us" and should not poise itself as a victim because "we are the victims here."

Yasay said the next move would be to speed up the opening of the airport, choose its expert operator with an international track record, and correct the 42 defects of the terminal, many of them concerning safety and security.

He also said the Chengs and Fraport will have to open their books to an audit if they want to be reimbursed for actual expenses minus those that are questionable, including the millions of dollars given Alfonso Liongson for questionable purposes.