Lawyer’s fees received by gov’t counsels in Piatco case are illegal, CA declares

The lawyer’s fees received by the government’s legal team for the arbitration case against the Philippine International Air Terminals Company (Piatco) are illegal, the Court of Appeals (CA) said in its recent ruling.

In a decision dated June 4, 2018 the appeals court’s special 11th division affirmed the ruling of the Mandaluyong Regional Trial Court dismissing the government’s bid to recognize the final award of the $6 million for the cost of arbitration proceedings.

The International Court of Arbitration ruled that Piatco, builder of the Ninoy Aquino International Airport Terminal 3 (NAIA 3), shouldered the costs of the case amounting to $24 million. Twenty-five percent of the said fee—$6 million—will be given to the claimant, which is the Philippine government team.

In 2012, the government sought a recognition of the ruling to which Piatco has opposed.

The Mandaluyong Court ruled that the award was not enforceable under Philippine laws for being against public policy.

The lower court ruled that the Procurement Law has been violated when the government tapped foreign counsels and legal consultants without conducting a public bidding.

Aggrieved, the Philippine government took the case to the CA.

The government won before the appeals court’s 17th division but Piatco filed a motion for reconsideration.

The Special 11th Division, in its recent ruling said “any enforcement and recognition of the Final Award, whose object is defined as 25% of those illegal government expenses is against Philippine public policy, indeed against Philippine law, and should be refused.”

“Besides, attorney’s fees are not granted every time a party prevails in a suit because of the policy that no premium should be placed on the right to litigate,” the appeals court said.

Former Chief Justice Maria Lourdes Sereno was part of the government’s legal team that defended the government in the arbitration case against Piatco.

Others in the Philippine team are White and Case, Allen & Gledhill, Sycip Salazar Hernandez & Gatmaitan and Follosco Morallos & Herce law firms. Also in the team are former Justices Florentino Feliciano and Vicente Mendoza. /jpv

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