Case Digest (G.R. No. L-23825)
Facts:
In 1994–1996, PIATCO (Philippine International Air Terminals Co., Inc.) won a build–operate–transfer contract to construct NAIA–Passenger Terminal 3 (PTIII). It subcontracted construction to Takenaka and equipment supply to Asahikosan. In Agan v. PIATCO (May 5, 2003), the Supreme Court nullified PIATCO’s concession for failure to meet bid requirements. Thereafter, on December 21, 2004, the Republic of the Philippines, through the Department of Transportation and Communications (DOTC) and Manila International Airport Authority (MIAA), filed an expropriation suit (Civil Case 04-0876) for PTIII, depositing the assessed value with Land Bank and securing a writ of possession. PIATCO and its subcontractors intervened, asserting credits. The Regional Trial Court (RTC), Pasay City, appointed the Bureau of Construction (BOC) commissioners and later an independent appraiser. In a decision dated May 23, 2011, the RTC fixed just compensation at US $175,787,245.10 less prior advances, and orCase Digest (G.R. No. L-23825)
Facts:
- The NAIA-IPT III BOT Project
- In 1997, the Philippines (DOTC/MIAA) awarded PIATCO a 25-year BOT concession to build, operate, and transfer Ninoy Aquino International Airport Passenger Terminal III (NAIA-IPT III).
- PIATCO subcontracted the onshore works to Takenaka and the offshore plant procurement to Asahikosan.
- Agan v. PIATCO (2003–2004)
- Supreme Court nullified PIATCO’s concession contracts for bid and equity defects.
- In its January 2004 resolution, the Court ordered the government to pay PIATCO just compensation before taking over the facility.
- Expropriation Proceedings (RTC Civil Case No. 04-0876)
- December 21, 2004: Government filed expropriation complaint, deposited P3 billion, and secured a writ of possession.
- Disputes arose over the application of Rule 67 (Rules of Court) vs. RA 8974 (expropriation for national infrastructure), and the appointment of commissioners and an independent appraiser (DG Jones).
- Republic v. Gingoyon (2005–2006)
- Supreme Court ruled RA 8974 applies: the government must immediately pay PIATCO the proffered value of P3 billion (replacement‐cost method for structures) before possession.
- Government authorized to operate and improve the terminal upon possession; full title transfers only after full compensation.
- BOC and Appraisals
- Board of Commissioners (BOC) and DG Jones reported conflicting replacement costs:
- Gleeds (government’s appraiser): base CCV US$300.2 M, less deductions.
- PIATCO: US$905.9 M (360.9 M construction + attendant costs + inflation + interest).
- Takenaka/Asahikosan: US$360.9 M (construction only).
- BOC: US$376.1 M (construction + 10% attendant cost).
- PIATCO, Takenaka, and Asahikosan objected to BOC’s expenses and procedural issues.
- RTC and CA Decisions on Just Compensation
- May 23, 2011 RTC fixed just compensation at US$149.4 M (government CCV + 10% attendant cost − deposit), no interest.
- August 7/22, 2013 CA amended to US$371.4 M (US$300.2 M CCV + legal interest at 6% − deposit).
- Enforcement of London Awards (Civil Case No. 06-171)
- Takenaka and Asahikosan obtained English judgments totaling ~US$84.0 M.
- RTC and CA recognized and enforced these awards; PIATCO appealed (G.R. No. 202166).
Issues:
- Procedural Due Process
- Did the trial court violate due process by not furnishing the BOC Final Report to PIATCO, Takenaka, and Asahikosan before its decision?
- Valuation Standard and Method
- Should just compensation be based on fair market value or replacement cost?
- Within replacement cost, which method—new or depreciated replacement cost—is appropriate?
- Components of Replacement Cost
- Base construction cost: should the Court adopt Gleeds’ US$300.2 M or challengers’ higher figures?
- Structural defects: do defects warrant deductions?
- Unnecessary areas: may retail mall or excess concession space be excluded?
- Attendant costs: should they be added, and if so, in what amount and on what proof?
- Deductions: depreciation, deterioration, non-compliance costs.
- Inflation adjustment: must the cost be updated to the expropriation date (Dec 21, 2004)?
- Interest, Fruits, and Income
- When and at what rate should interest on just compensation accrue?
- Is PIATCO entitled to income or “fruits” from the terminal?
- Allocation of Costs and Payment
- Must Takenaka and Asahikosan share BOC expenses?
- Who is the proper recipient of just compensation—the property owner alone or also subcontractors?
- May the government deposit compensation in escrow pending other claims?
- Possession vs. Title Transfer
- When may the government take possession and operate the terminal?
- When does title actually transfer to the government?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)