SC affirms CA ruling vs Piatco

MANILA, Philippines - The Supreme Court (SC) has upheld a ruling of the Court of Appeals (CA), ordering Philippine International Air Terminals Co. Inc. (Piatco) to pay Japanese builders Takenaka Corp. and Asahikosan Corp. its contractual obligations for the construction of the Ninoy Aquino International Airport (NAIA) Terminal 3.

In a 12-page decision released yesterday, the third division of the high court dismissed a petition of Piatco, assailing the ruling of the CA in July 2007 that affirmed a June 2006 decision of the Makati regional trial court. The RTC had junked the firm’s bid for immediate dismissal of the claims of the Japanese firm based on two judgments of the Queen’s Bench Division in London.

“The court does not see any reason to overturn the CA’s finding that there was no grave abuse of discretion on the part of the trial court in denying the motion to dismiss. In this case, there is no showing of such capricious or whimsical exercise of judgment or arbitrary and despotic exercise of power committed by the trial court,” read the ruling penned by Associate Justice Diosdado Peralta.

This case covers only the motion of Piatco to stop the Makati Regional Trial Court from proceeding with the case.

Makati RTC Branch 143 Judge Zenaida Galapate-Laguilles already ruled earlier in favor of the claims of the Japanese firms and ordered Piatco to pay them $172 million.

Last month, the third division of the CA dismissed the motion for reconsideration of Piatco and affirmed its ruling last March that upheld the decision of the trial court giving the two Japanese firms the go-signal to collect their claims from Piatco.

The CA had agreed with the RTC that Takenaka and Asahikosan are entitled to collect the amounts of $81.27 million, P116.8 million and ?65,000 from Piatco pursuant to the two judgments they obtained against the firm from the High Court of Justice, Queen’s Bench Division, Technology and Construction Court in London in 2005.

Piatco was also ordered to pay Takenaka and Asahikosan P2 million as attorney’s fees and P77.8 million as litigation expenses.

“True, Piatco’s perceived ‘very low’ valuation that could be finally adjudged in that case, e.g $175,787,245.10, might severely affect Piatco’s solvency or ability to pay its creditors, including appellees, but such matter is for future insolvency proceedings to tackle, and not in the present case. Moreover, the value or build quality of the completed facilities are matters of defenses that should have been raised before the London proceedings, not in this case,” the appeals court added.

The CA also stressed that while the structural soundness of the airport should not be tackled in the case, Piatco can still raise such issue in other remedies or actions.