Palace hails Singapore court decision on Piatco case

MANILA, Philippines - Malacañang has described as a victory the Singapore High Court decision denying the petition of the Philippine International Air Terminals Co. (Piatco) for compensation over the revocation of its contract to operate the Ninoy Aquino International Airport (NAIA) Terminal 3.

Presidential spokesman Edwin Lacierda yesterday said the ruling vindicated the Philippines as he gave assurance that all transactions under the Aquino government would be aboveboard.

“Obviously we feel vindicated. Like we promised that under this new administration, we’re going to level the playing field, that rules will be made clear to them and that all transactions should be at arm’s length,” he told reporters.

“It’s a victory for the government of the Philippines. It clearly shows the legitimate position of the government and this is not a hometown decision, this is a standard by a foreign court,” he added.

Lacierda said they are hopeful that Piatco would move on following the court’s decision.

He, however, said the government is ready for any legal action that Piatco may undertake.

“Of course we like Piatco to move on. Apparently, Piatco feels it has the right to claim from the government and that’s one thing they would insist and that’s what we are prepared to defend,” he said.

When asked to react to the fact that the Piatco case has been used to damage the Philippines’ reputation as an investment site, Lacierda replied: “I think it’s just a matter of informing them (investors) and clarifying to them that the Piatco contract was entered into under the previous administration.”    

Earlier, the Singapore High Court dismissed the petition for compensation of Piatco, upholding the ruling of the International Chamber of Commerce’s arbitration tribunal in July 2010. The court also junked Piatco’s motion to set aside ICC’s decision, which directed Piatco to pay the Philippine government more than $6 million.

The high court disagreed with Piatco’s claim that the ICC misapplied the Anti-Dummy Law. The court also found it “disingenuous” for Piatco to claim that it was not given the right to be heard on the issue since records of the case showed that the firm argued its case before the arbitral tribunal.

It was the fourth time that domestic and international tribunals have ruled against the legality of Piatco’s dealings with its German partner, Fraport, in connection with the NAIA 3 project.

The government had taken over the operations of NAIA 3 in 2004 after the Supreme Court voided the build-operate-and-transfer deal it inked with Piatco. The deal allowed Piatco to construct the $650-million NAIA 3 and grant a franchise to operate and maintain the terminal during a concession period of 25 years.

The court, however, declared the contracts null and void as it ruled that Paircargo Consortium, the predecessor of Piatco, did not have the required financial capacity when it was awarded the NAIA 3 contract.

Piatco then sued the government before the ICC in Singapore where it demanded at least $565 million in damages.