Case Digest (G.R. No. 181892)
Facts:
In Republic of the Philippines v. Hon. Jesus M. Mupas et al. (G.R. Nos. 181892, 209917, 209696 & 209731; April 19, 2016), the Republic of the Philippines, represented by Executive Secretary Eduardo R. Ermita, the Department of Transportation and Communications (DOTC), and the Manila International Airport Authority (MIAA) (collectively “the Republic”), sought judicial determination of just compensation for the expropriation of the Ninoy Aquino International Airport Passenger Terminal III (NAIA-IPT III). On July 12, 1997, the Republic had executed a Concession Agreement with Philippine International Airport Terminals Co., Inc. (PIATCO) for the build-operate-transfer of NAIA-IPT III; PIATCO in turn subcontracted construction to Takenaka Corporation and plant procurement to Asahikosan Corporation on March 31, 2000. PIATCO failed to pay these contractors in May 2002. In *Agan v. PIATCO* (450 Phil. 744 [2003], 465 Phil. 545 [2004]), the Supreme Court nullified the Concession AgreementCase Digest (G.R. No. 181892)
Facts:
- Concession agreements and subcontracting
- On July 12, 1997, the Republic of the Philippines (through the Department of Transportation and Communications and the Manila International Airport Authority) executed a 25-year build-operate-transfer concession agreement with Philippine International Air Terminals Co., Inc. (PIATCO) for the construction, development, and operation of NAIA–Passenger Terminal III.
- On March 31, 2000, PIATCO subcontracted the onshore construction to Takenaka Corporation and the offshore procurement of plant and equipment to Asahikosan Corporation. By May 2002, PIATCO failed to pay these contractors.
- Nullification of concession and Agan v. PIATCO
- In Agan v. PIATCO (2003), the Supreme Court nullified the concession for lack of proper prequalification and substantial departures from the draft agreement; its January 21, 2004 resolution denied reconsideration and directed the Republic to pay PIATCO just compensation before takeover to avoid unjust enrichment.
- Expropriation proceedings in the RTC
- On December 21, 2004, the Republic filed an expropriation complaint (Civ. Case No. 04-0876, RTC Pasay, Br. 117) to acquire only the NAIA–PT III structure; that same day the RTC issued a writ of possession under Rule 67, Rule 67 being later supplemented by an order applying RA 8974 and directing immediate release of deposits (US$62,343,175.77) to PIATCO.
- Takenaka and Asahikosan intervened, seeking abeyance of compensation releases pending enforcement of their London‐awards against PIATCO.
- Gingoyon case and writ of possession
- In Republic v. Gingoyon (2005–2006), the Supreme Court issued a TRO and preliminary injunction against the RTC orders; on December 19, 2005 it held that RA 8974 valuation standards apply, equity must be considered, and that the writ of possession would be effective only upon payment of the proffered value (₱3 billion).
- The ROC tendered the ₱3 billion proffered value on September 11, 2006; that same day the RTC reinstated the writ of possession in favor of the Republic.
- Appellate decisions on just compensation
- RTC Decision (May 23, 2011) set just compensation at US$116,348,641.10; directed sharing of BOC expenses among Republic, PIATCO, Takenaka, and Asahikosan.
- CA Amended Decision (as of July 31, 2013) revised just compensation to US$371,426,688.24 plus 6% per annum interest; held Takenaka and Asahikosan jointly liable for BOC expenses.
- Consolidated petitions before the Supreme Court
- G.R. No. 181892: Republic challenged RTC orders appointing DG Jones & Partners as independent appraiser.
- G.R. Nos. 209917, 209696, 209731: Republic, PIATCO, and Takenaka/Asahikosan questioned the CA decision on just compensation and expense‐sharing.
- On September 8, 2015, the Supreme Court en banc issued a Decision adopting the depreciated replacement cost method, awarding PIATCO US$326,932,221.26 as principal less the proffered value, imposing interest on the unpaid balance, absolving subcontractors from expense‐sharing, and directing direct payment to PIATCO.
Issues:
- Valuation method
- Is the depreciated replacement cost method permissible under RA 8974 and its IRR?
- Should attendant costs, structural defects, and unnecessary areas be included or excluded from the base replacement cost?
- Interest on just compensation
- Is PIATCO entitled to interest on the unpaid portion of just compensation?
- From what date should interest be reckoned, and at what rate?
- Evidentiary and expense‐sharing issues
- Are PIATCO’s photocopied documents admissible proof of attendant costs?
- Are PIATCO and subcontractors liable to share BOC (Bids and Awards Committee) expenses or set aside funds in escrow for London‐award claims?
- Vesting of ownership and liens
- Upon payment of just compensation, does full ownership vest in the Republic free from all liens and encumbrances?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)