(Eagle News) — Voting 10-0, the Supreme Court on Wednesday (Sept. 9) ordered the Philippine government to pay the Philippine International Air Terminals Co. Inc. (Piatco) $510.3 million as “just compensation” for expropriating the International Passenger Terminal III (IPT III) of the Ninoy Aquino International Airport (NAIA) almost a decade ago.
The amount, included interest as of Dec. 31, 2014. It does not include the interest from Jan. 1, 2015 until Piatco is fully paid.
The 144-page decision of the high court, penned by Justice Arturo Brion, ruled that “Piatco, as the owner of the NAIA-IPT III, shall solely receive the just compensation.”
“Piatco, as the owner of the NAIA-IPT III, shall solely receive the just compensation. Based on the last paragraph, Section 4 of RA 8974 and the prevailing jurisprudence, it is the owner of the expropriated property who is constitutionally entitled to just compensation. Other claimants should be impleaded or may intervene in the eminent domain case if the ownership of the property is uncertain or there are conflicting claims on the property pursuant to Section 9, Rule 67 of the Rules of Court.
During the term of then President Fidel Ramos, the Philippine government awarded the contract to build the NAIA Terminal 3 to the consortium of Piatco and the German firm Fraport in 1997. President Gloria Macapagal-Arroyo, however, voided the contract in 2002 because of alleged irregularities.
On Dec. 21, 2004, the Office of the Solicitor General filed an expropriation case in the Pasay Regional Trial Court to enable the government to operate the terminal at the soonest time possible. The Pasay court issued a writ of possession to the government, but it ruled that the government should pay Piatco P3 billion or $53.57 million as downpayment for compensation which still has to be determined .
On Wednesday, Sept. 9, the high court ruled what this compensation should be.
“The principal amount of just compensation is fixed at $326,932,221.26 as of December 21, 2004. Thereafter, the amount of $267,493,617.26, which is the difference between $326,932,221.26 and the proffered value of $59,438,604.00, shall earn a straight interest of 12 percent per annum from September 11, 2006 until June 30, 2013, and a straight interest of 6 percent per annum from July 1, 2013 until full payment,” the High Court ruled.
The Supreme Court also computed the 12 percent annual interest due on this principal amount of $267.49 million from Sept. 11, 2006 to Dec. 31, 2014. The amount computed was $242.8 million. Added to the principal amount, the just compensation to be paid by the government directly to Piatco was $510.3 million as of 2014 computation.
“The government is hereby ordered to make direct payment of the just compensation due to Piatco; and the government is hereby ordered to defray the expenses of the Board of Commissioners (created in 2005 to determine just compensation) in the sum of P3,500,000,” the SC ruling said.
“Piatco, as the owner of the NAIA-IPT III, shall solely receive the just compensation. Based on the last paragraph, Section 4 of RA 8974 and the prevailing jurisprudence, it is the owner of the expropriated property who is constitutionally entitled to just compensation. Other claimants should be impleaded or may intervene in the eminent domain case if the ownership of the property is uncertain or there are conflicting claims on the property pursuant to Section 9, Rule 67 of the Rules of Court.
“The Government may deprive Piatco of the ordinary use of the NAIA-IPT III upon the issuance and effectivity of the writ of possession on September 11, 2006. However, the Government shall only have ownership of the NAIA-IPT III after it fully pays Piatco the just compensation due,” the SC further ruled.
The high court also said that the expenses of the BOC “shall be shouldered by the Government as the condemnor of the property pursuant to Section 12, Rule 67 of the Rules of Court.”
“The record of the present case show that Piatco has been the original contracting party commissioned by the Government to construct the NAIA-IPT III based on a build-operate-transfer arrangement and who, in this capacity, contracted out the actual construction to Takenaka and Asahikosan. Thus, when the NAIA-IPT III was built, it was in Piatco’s name and account, although it subsequently owed sums to subcontractors, incurred in the course of the construction. From this perspective, Piatco has been the owner recognized as such by the Government although the basis of its contractual relationship with the Government was later on nullified. Takenaka and Asahikosan, on the other hand, had always been subcontractors with whom the Government did not have any formal link. These facts indubitably show that Piatco has been the owner of the NAIA-IPT III entitled to receive the just compensation due. Takenaka and Asahikosan for their part, have not shown that they possess legal title or colorable title to the NAIA-IPT III that would defeat Piatco’s ownership,” the High court explained.
It said that Takenaka and Asahikosan shall not share in the expenses of the BOC. Piatco is also deemed to have waived its right not to share in the expenses of the BOC since it voluntarily shared in the expenses of the BOC, the court said.
“We declare the issue of the appointment of DG Jones and Partners as an independent appraiser of the Ninoy Aquino International Airport Passenger Terminal III moot and academic. The temporary restraining order issued on January 9, 2008, against the implementation of the May 3, 2007; May 18, 2007; and January 7, 2008 orders of the Regional Trial Court of Pasay City, Branch 117 is hereby made permanent.”
Justices Presbitero J. Velasco Jr., Teresita J. Leonardo-de Castro, Diosdado M. Peralta, Lucas P. Bersamin, Martin S. Villarama Jr., Jose Portugal Perez, Jose Catral Mendoza, Estela M. Perlas-Bernabe, were the Supreme Court justices who concurred in the decision, while Justice Marvic Mario Victor F. Leonen concurred in the results and had a separate concurring opinion.
Four members of the high court — Chief Justice Maria Lourdes P.A. Sereno, Senior Justice Antonio T. Carpio, and Justices Mariano C. del Castillo and Francis H. Jardeleza — did not take any part in the deliberations and in the resolution of the consolidated cases. Another member of the high court, Justice Bienvenido L. Reyes is on leave.
