Friday, 18 November 2011

Singapore High Court backs Philippines in airport dispute

by Jeremiah F. de Guzman
Manila Standard

SINGAPORE’S High Court on Wednesday rejected a German firm’s bid to take over Terminal 3 of the Ninoy Aquino International Airport, giving the Philippine government full control of the facility.

The court denied Philippine International Air Terminals Co. Inc.’s plea to set aside a July 2010 decision of the International Chamber of Commerce declaring the airport builder may not operate Terminal 3 as that would violate the Philippines’ Anti-Dummy Law.

The court also ordered Piatco, and its foreign investor Fraport AG of Germany, to pay the Philippine government over $6 million in court proceedings.

The court’s dismissal of Piatco’s claim is the fourth time that domestic and international tribunals have ruled against it and Fraport.

Sources said that dismissal would allow the government to continue with its rehabilitation and operation of Terminal 3 as a world-class international airport. The government expropriated the facility in 2005.

Sought for comment, Piatco president Jennifer Bote said by telephone that the company no longer was keen to operate Terminal 3.

“We are only after the just compensation. We are no longer interested to operate the airport,” Bote said.

She said the Singapore court’s ruling should have no bearing on a pending case before the Court of Appeals against an earlier decision for a $175-million compensation for Piatco.

Piatco had earlier demanded to be paid $1.1 billion for building the terminal, but Bote said the total had reached $1.7 billion as of Dec. 30, 2010.

In 2003 the Supreme Court voided Piatco’s concession contract and all its three supplemental agreements on the construction and operation of Terminal 3 on grounds it was not qualified to bid for the project.

The high court granted the government’s petition to have the Piatco contract nullified on grounds it was a disqualified bidder, and that the supplemental contracts contained material deviations from the original contract that was forged in 1997.

Piatco’s foreign partner, Fraport AG, sued the Philippine government for a reimbursement claim worth $425 million with the Washington-based International Center for the Settlement of Investment Disputes, a World Bank institution, but that body rejected its claim in 2007.

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