The Philippine government prevailed again against Piatco in their attempt to set aside the July 22 2010 Award in the   international arbitration involving NAIA Terminal III.  The government welcomed the Singapore High Court’s Decision delivered yesterday (November 15,2011) which  denied Piatco's Application for Set Aside of the ICC Award rendered by a distinguished tribunal (Michael Pryles; Johnny Veeder and Florenz Reglado)arising out of the annulled Concession Agreements concerning Terminal  III and ordered PIATCO to pay the costs of the proceeding.

In 2003, the Philippine Supreme Court nullified Piatco’s build, operate and transfer contract over the airport for violation of bidding rules and other laws and for modifying the contracts to the disadvantage of government. Piatco sued the government before the International Chamber of Commerce (ICC) in Singapore where it sought to recover at least $565 million in damages. Its foreign investor, Fraport, separately sued the government at the International Center for the Settlement of Investment Disputes (ICSID) in Washington DC.

In August 2007, the ICSID affirmed the Supreme Court’s nullification of the concessions and rejected Fraport’s claim because of its violation of the Anti-Dummy Law. In an Award rendered in July 2010, the ICC also rejected PIATCO’s claim because of illegality arising from PIATCO’s violation of the Anti-Dummy Law.  The said law requires that the operation, management and control of public utilities such as the NAIA airport should remain with Filipinos. The ICC tribunal found that Piatco and its foreign investor Fraport, illegally ensured that Fraport shall control the public utility through secret shareholder agreements and loans.  In its final award last May, the international tribunal further ordered Piatco to pay the government more than $6 million in costs. PIATCO has since applied to the Singapore High Court to also annul the ICC tribunal’s award on costs.

Piatco asked the High Court of Singapore to reverse the ICC’s partial award dismissing its claims on the ground that the ICC tribunal misapplied the Anti-Dummy law. According to the High Court, it is plain that the international tribunal acted within its powers in dismissing Piatco’s claims on the ground of illegality and that the arbitration tribunal observed due process in arriving at this decision. The High Court said it was unconvinced that the ICC tribunal misapplied the Anti-Dummy law and found it disingenuous for Piatco to insist that it was not given the right to be heard on the issue although the case records show that PIatco fully argued its case before the arbitral tribunal.  The High Court’s dismissal of Piatco’s claim is the fourth time that domestic and international tribunals have ruled that Piatco and Fraport committed illegality in the NAIA Terminal III Project and denied their claims as such.

            According to sources, the dismissal of PIATCO’s application to reverse the awards denying its claims against government paves the way for government’s unhampered rehabilitation and operation of the terminal as a world class international airport.  The government has expropriated the facility in 2005. Last May, the government was ordered to pay just compensation to Piatco in the amount of $175 million, less the more than PHP 3 Billion proffered value of the expropriated facility which was earlier paid to Piatco.  The government has since offered to deposit the money in escrow as payment of just compensation to Piatco.