CA voids just compensation for NAIA-3

MANILA, Philippines - The government cannot exercise full ownership over the Ninoy Aquino International Airport Terminal 3 (NAIA-3) unless it releases $371.43 million from escrow to developer Philippine International Air Terminals Company Inc. (Piatco) as just compensation.

The Court of Appeals (CA) made this ruling as it struck down the mode of just compensation payment for Piatco earlier set by the Pasay regional trial court (RTC).

In a 21-page ruling on Oct. 10, the 13th division of the appellate court voided the order of Pasay City RTC Branch 117 in October 2011 that required the government to deposit the amount in an escrow account and imposed conditions for its release.

The CA granted the petition of Piatco and held the Pasay court committed an error in issuing the orders pursuant to its May 23, 2011 ruling that ordered the government to pay the developer net just compensation amounting to $116,348,641.10.

The requirements to create an escrow account and several conditions for its release were “not sanctioned by law nor supported by jurisprudence,” according to the ruling penned by Associate Justice Franchito Diamante.

The assailed Pasay court order required Piatco to submit a warranty that the structures and facilities of NAIA-3 are free from all liens and encumbrances.

The court order also required Piatco to make an undertaking that it is assuming sole responsibility for any claims from third persons arising from or relating to the design or construction of any structure or facility of NAIA-3 structures and execute a deed transferring the title of the airport structures and facilities to the government, “without prejudice to the amount which will finally be awarded to it by the appellate court.”

The CA said these conditions violated the law and Supreme Court rulings on expropriation proceedings.

The appellate court said any delay in the payment of just compensation is tantamount to a deprivation of one’s property.

“We agree with Piatco that deposit of just compensation in an escrow account does not constitute ‘payment’ that would extinguish an obligation as contemplated in the Civil Code and other relevant laws,” the CA stressed.

“Taking into consideration the nature of expropriation proceedings where the property owner was simply forced to part with its property, with more reason that payment to him should be immediate and without delay.”

The CA also said the conditions imposed by the Pasay court make it legally impossible for Piatco to get just compensation.

It cited for instance the third condition requiring Piatco to submit a deed transferring title of the NAIA-3 facilities to the government without prejudice to the final amounts which will finally be awarded to it by the CA.

But the CA said the ownership may only transfer to the government and subsequent registration of the property may be made when the decision on expropriation becomes final and executory, pursuant to the implementing rules and regulations of Republic Act 8974, the law that governs right-of-way acquisition for national government projects.