AEDC insists on Naia 3 takeover
YASAY, IN SUPREME COURT ARGUMENT, SAYS LUCIO TAN FIRM
TO REIMBURSE GOVT

By Joel San Juan
Reporter

LUCIO TAN’s Asia’s Emerging Dragon Corporation (AEDC) on Tuesday called on the Supreme Court to stop the ongoing expropriation proceedings on the Ninoy Aquino International Airport Terminal 3 and insisted that it would be in the government’s interest if the contract for its operation were to be awarded to the company.

At Tuesday’s oral arguments on the AEDC’s petition for mandamus, Supreme Court justices dwelt on the business and legal implications of awarding the Naia Terminal 3 project to AEDC, particularly its effect on the ongoing expropriation proceedings pending before the Pasay City Regional Trial Court.

Former Securities and Exchange Commission chairman Perfecto Yasay Jr., counsel for AEDC, assured the justices that the company is ready to assume the government’s financial commitments to Philippine International Air Terminals Co. Inc. (Piatco) and its subcontractor Takenaka Corporation in exchange for the right to operate Naia Terminal 3.

Yasay said his client is willing to reimburse the P3- billion proffered value that the government paid to Piatco as initial compensation.

Likewise, the AEDC will shoulder the government’s obligations to Piatco, the builder of Naia Terminal 3. He, however, clarified that Piatco should only be paid for the reasonable cost and actual value of the facility.

“Piatco should never be allowed to profit or be rewarded through just compensation. Just compensation is tantamount to rewarding Piatco, which is unlawful since the property where that facility stands on is owned by the government,” Yasay noted.

“The land is owned by the government and for the government to expropriate its own land will be unlawful. To allow Piatco to profit will be unconscionable,” he said.

He called on the Court to nullify the expropriation proceedings pending before the Pasay RTC.

Yasay further explained that the government would be prevented from using public funds if it gets the Naia 3 contract. He reiterated that it is illegal for the government to use public funds for projects covered by the build, operate and transfer (BOT) law.    

“The government will not only receive immense benefit, but it’s for public interest as well as the government; [it] will be relieved of its financial commitment to Piatco . . . The AEDC is willing to reimburse the government whatever the amount it paid to Piatco. The money will not be derived from government funds,” Yasay said.

AEDC anchored its claim over the right to operate Naia 3 on the May 5, 2003, decision of the Court declaring null and void the award of said contract to Piatco for being contrary to public policy.

The nullification of Piatco’s contract with the government has restored the group’s status as the “unchallenged original proponent” of Naia Terminal 3 project, Yasay told the Court.

Being so, AEDC said it is automatically entitled to the award of the contract in accordance with Section 4 of Republic Act 6957, as amended by Republic Act 7718 otherwise known as the BOT law.

The said provision, according to AEDC, “grants the original proponent with an incentive and advantage where, in the absence of any comparative or competitive proposal, the BOT project is automatically awarded to the original proponent. Or, in the event a lower price proposal is offered, the original proponent is given the right to match.”

Also during the interpellation, Yasay estimated that it would take more than P100 million to complete the project, a sum he said the AEDC is willing to pay along with an additional P80 to P100 million being demanded by Takenaka, a Japanese construction company.

Piatco, on the other hand, is pursuing a $500-million claim against the government before an international trade arbitration tribunal.

Yasay, however, noted that based on AEDC’s unsolicited proposal the contractor would only need $350 million to complete the facility.
 
“If there will be no assistance coming from AEDC, then it would be impossible for the government to bear this amount,” he added.

Meanwhile, Associate Justice Romeo Callejo Sr. raised the possibility that AEDC is already barred from pursuing its right to operate the new airport based on the April 30, 1999 ruling of the Pasig Regional Trial Court on a similar petition filed by AEDC.

During the oral arguments, lawyer Jose Bernas, counsel for intervenor Lakas Rep. Salacnib Baterina of Ilocos Sur, also urged the Supreme Court to dismiss the expropriation case filed by the government against Piatco, saying the government is not bound to pay any compensation or damages to Piatco after its concession contract was declared null and void.

Callejo said the case was eventually dismissed with prejudice by said court on April 30, 1999 upon the execution of a joint motion to dismiss by the parties.

Thus, he said, the petition for mandamus filed by the AEDC cannot be refiled before the Supreme Court since it is the same case which was dismissed by the Pasig RTC.   

Bernas quoted Chief Justice Artemio Panganiban who stated in one case: “A void contract is equivalent to nothing, and no award for liquidated damages may arise out of a void contract.”

Bernas said: “In other jurisdictions, if the contract was procured by fraud, no recovery is permitted because no rights may arise out of an illegality.”