The Philippine government has finally won its arbitration case against Philippine International Air Terminals, Co (Piatco), ending a nine-year legal battle over rights to operate Ninoy Aquino International Airport Terminal 3 (NAIA T3).
Manila International Airport Authority general manager Jose Angel Honrado said the decision by the International Chamber of Commerce (ICC) was final and executory.
“This final ICC ruling, coupled with payment of just compensation in the expropriation case decided in our favor by the Regional Trial Court of Pasay City, will pave the way for the full commercial operations of the NAIA Terminal 3,” he said.
The terminal is currently being used only by budget airlines Cebu Pacific and AirPhil Express. The messy legal battle has kept other airlines from operating out of the facility.
It may be recalled that Piatco in 2003 filed an arbitration request before the ICC in Singapore to compel the Philippine government to honor its contract to allow Piatco, which had constructed the terminal, to operate and maintain the facility for 25 years. Piatco also sought $565 million in damages from the Philippine government.
The ICC ruling was facilitated by the withdrawal of the second application placed by Piatco before the ICC on December 27, 2011 that sought to reverse an earlier ICC ruling dismissing its claims against the Philippine government.
The Philippine Supreme Court in 2003 declared the PIATCO concession agreement null and void for having been “amended and re-stated” without the stamp of approval of the National Economic and Development Authority.
The court said Piatco predecessor Paircargo Consortium did not possess the requisite financial capacity when it was awarded the NAIA-3 contract and that the agreement was contrary to public policy.
PIATCO’s foreign investor, Fraport, separately sued the Philippine government at the International Center for the Settlement of Investment Disputes (ICSID) in Washington. But in August 2007, the ICSID affirmed the SC’s nullification of the concessions and rejected Fraport’s claim because of its violation of the Anti-Dummy Law.