MANILA, Philippines—The Court of Appeals (CA) has ordered the government to pay the Philippine International Air Terminals Co. Inc. (Piatco), the builder of Ninoy Aquino International Airport (Naia) Terminal 3, “just compensation” amounting to $371,426,688.24 (about P16.2 billion) for the expropriation of the terminal.
The amount was what the company was owed as ofJuly 31 and was based on a legal interest rate pegged at 6 percent per annum, according to the appellate court’s third division which modified the May 23, 2011, ruling of the Pasig Regional Trial Court Branch 117.
Certain aspects of the lower court’s ruling were questioned before the appellate court by Piatco, the government as well as intervenor-appellants, Takenaka Corp. and Asahikosan Corp., which are subcontractors of Piatco.
No interest awarded
The Pasig court had ordered the government to pay Piatco a much lower amount, $175,787,245.10 (P7.6 billion), less the P3 billion down payment that the government had already paid to Piatco, as compensation. The lower court did not award any interest as part of any compensation to be paid to Piatco.
In addition, the government and the intervenors were asked to pay their proportionate share of the fee for the three-member Board of Commissioners of P1.75 million each.
But the lower court held in abeyance the resolution of the intervenors’ claim for compensation from Piatco.
The Board of Commissioners was a panel, reportedly composed of three lawyers, which the Pasig court had convened to aid it in determining the amount of “just compensation” that should be paid to Piatco.
The CA ruling, dated Aug. 7 and penned by Associate Justice Apolinario B. Bruselas Jr., modified the lower court’s ruling by fixing the “just compensation” to Piatco at $300,206,639, minus the $59,438,604 paid in September 2006, for a net sum of $240,768,035.00, with legal interest rate of 6 percent.
It added that “upon finality of judgement, interest on the sum due by then shall be 12 percent until fully paid.”
In coming up with its computation, the appellate court defined just compensation as referring to “the full and fair equivalent of the property sought to be expropriated” and explained that “the measure is not the taker’s gain but the owner’s loss.”
“To arrive at just compensation, we simply put in the figure determined as replacement cost, which is $300,206,693 and factor in law and equity. Law and equity, however, dictate that interest should be imposed on the amount due Piatco,” it said.
Noting that the Pasig court did not award interest as part of the just compensation for Piatco, the court said it would be unfair not to do so because “evidently the republic has been enjoying the income or fruits from the operation of the structures it has expropriated.”
“(I)t is just and reasonable to award interest in this case because of the delay in the payment of just compensation considering that Piatco had spent substantial funds in the construction and installation of Naia Terminal 3 which the government had already taken over and benefited for a period of time,” it said.
But the court said it did not agree with Piatco’s claim of 12-percent interest rate, which was also the recommendation made by the Board of Commissioners.
Instead, the court said that since there was no stipulation as to the interest and “considering all of the peculiar circumstances and equities of the case,” it was fixing the interest rate at 6 percent per annum.
“There is no doubt that the obligation of the republic to Piatco is to pay a sum of money and that there is a delay in the full performance of such an obligation,” it said.