“We did not win. The PIATCO claim was dismissed but all of the 23 counterclaims our government filed were also dismissed.”
by Ducky Paredes
Imagine yourself an employee in an agency or an owned or controlled corporation of government. It’s tough getting any additional pay or benefits. There never is any money for the rank-and-file.
Yet, the political appointees of Government-Owned and Controlled Corporations (GOCCs) take home millions.
Even worse is the situation for the rank-and-file employees of the Manila International Airport Authority (MIAA) whose appeal for pay increases or the mere integration of the cost-of-living allowances (COLA) and amelioration allowances of MIAA workers into their salaries has been pending for ten years. The case is now in court, even as most other workers in other government agencies have had these same benefits for years.
Yet, this is a pittance compared to what the MIAA has been shelling out due to a miscalculation of Gloria Arroyo.
The work on Terminal 3 of the MIAA began during the Ramos presidency and continued under Erap. In 2002, amid rumors that the contractor PIATCO (composed of Germany’s Fraport AG and its local partner Paircargo of the Cheng family) had not come up with the proper funds, Gloria revoked the contract with PIATCO.
Our Supreme Court then ruled that the contract was, anyway, void ab initio. Like an annulled marriage, the contract never happened; but the SC allowed PIATCO to sue for just compensation and ordered the government to pay P3.2 billion for the semi-finished building constructed by PIATCO.
PIATCO, in suing for just compensation, decided not to go to a Philippine court but to the arbitration court in Singapore’s International Chamber of Commerce.
Since 2002, the MIAA, so stingy with its rank-and-file has already spent (as of February) $46,573,787.60, equivalent to P2,095,820,442.00! This is what the arbitration case had so far cost this poor country – in lawyer’s fees.
Last Feb. 4 alone, the MIAA released $3.5 million to the Office of the Solicitor General (OSG) to pay for legal fees in the arbitration proceedings. In February of last year, $2.36 million was withdrawn from MIAA’s account in favor of the OSG. A letter to the Landbank dated Feb. 23, 2009 and signed by GM Al Cusi and MIAA Senior Assistant General Manager Roberto Uy confirms the release of this amount to the OSG.
Through several resolutions adopted by the MIAA Board starting in 2003, the agency has been releasing funds to the OSG for the expenses incurred for the arbitration proceedings.
And, it’s not over yet. Another $400,000 (P20 million) is about to be spent.
The good news is that, according to government, we have won the arbitration case filed by PIATCO. Malacañang claims that the government saved $1.1 billion or roughly P49 billion by winning the arbitration case.
The government is telling a half-truth. To get to $1.1 billion, it added the cases filed by PIATCO ($565 million) and Fraport ($465 million before the World Bank’s International Centre for Settlement of Investment Disputes, which was dismissed earlier).
We did not win. The PIATCO claim was dismissed but all of the 23 counterclaims our government filed were also dismissed.
In fact, the ICC noted how badly our case was represented by stating in it decision that when the Philippine government “turns to discuss each particular counterclaim, with some exceptions, it does not point to a particular legal basis for putting forward the claim.
“Where it does point to a legal basis, it is not at all clear to the Tribunal that such basis supports the counterclaim made. In those circumstances, it is not the role of this Tribunal to select an appropriate legal basis for each of the counterclaim out of the potpourri proffered by the Respondent (Philippine government) in its introduction to the counterclaims.”
So, what were our lawyers doing?
These local and foreign lawyers included retired Supreme Court justice Florentino Feliciano and UP Professor Maria Lourdes Aranal Sereno, who was recently appointed to the high tribunal by President Aquino. Initially, the OSG represented the Philippines in the ICC proceedings in Singapore and hired services of international law firm White and Case, which later also hired the services of Florentino and Sereno.
It was reported that during the ICC hearings in Singapore, a minimum of 10 government lawyers from the OSG were present. Wow! We had the lawyers from White and Case, Feliciano and Sereno plus ten OSG tourists?
Among these counterclaims was a plea before the arbitration body to declare PIATCO a “builder in bad faith,” which would have denied PIATCO the right to recover its expenses incurred in building Terminal 3 and would have allowed our government to claim damages for its graft-ridden contract.
The Singapore arbitration tribunal ruled instead that PIATCO was a “builder in good faith,” and could seek compensation to recover its costs in building NAIA-3.
I really think that we lost – at least two billion pesos and counting — for the unsuccessful and pointless and useless legal campaign that we incurred. In fact, our expenses for Terminal 3 went up by two billion pesos in legal fees and PIATCO is not done with us, yet!
And the poor rank-and-file of the MIAA have not yet been given their just compensation!
* * *
The first P’Noy appointment to the Supreme Court, UP Professor Maria Lourdes Aranal Sereno was a major participant in “winning” against PIATCO, right?
Malacañang spokesman Edwin Lacierda, in announcing her appointment said that the President does not personally know Sereno, but that she was chosen based primarily on her “admirable” credentials, particularly her role on the PIATCO case.
Lacierda stated that Sereno’s competence couldn’t be questioned, as, according to him, she was among those instrumental in the Philippine government’s victory against PIATCO and Fraport in the arbitration proceedings involving NAIA-3.
But, how can that be when an official document shows that Sereno was no longer involved in the arbitration proceedings as of August 28, 2008.
A letter sent by fax and e-mail by White and Case to the ICC tribunal members in Singapore on that date stated that Sereno was no longer connected with the PIATCO case.
Signed by White and Case’s Carolyn B. Lamm, the letter said: “Please be advised that Ms. Maria Lourdes Sereno is no longer one of the Respondent’s Representatives as listed in Section 1.3 (b) of the Terms of Reference and should not be copied on future correspondence.”
The Office of the Solicitor General also received copies of the letter from White and Case.
The arbitration proceedings just recently ended; so how could now Justice Sereno have been involved in winning the case if she had already dropped out as legal counsel two years before?
At least, it proves that neither the president nor his spokesman personally knew her or even of her.
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hvp (08.26.10)
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