G.R. No. 181892 /G.R. No. 209917/G.R. No. 209696/G.R. No. 209731, April 19, 2016
Republic of the Philippines, et al. vs. Hon. Jesus M. Mupas, et al./Republic of the Philippines, et al. vs. Philippine International Air Terminals Company, Inc., et al./Takenaka Corporation and Asahikosan Corporation vs. Republic of the Philippines, et al./Philippine National Air Terminals, Co., Inc. vs. Republic of the Philippines, et al.

FACTS

The Republic, through the Department of Transportation and Communications and the Manila International Airport Authority, entered into a concession agreement with Philippine International Air Terminals Co., Inc. (PIATCO) for the construction and operation of the NAIA Terminal 3 under a build-operate-transfer scheme. These contracts were subsequently nullified by the Supreme Court in Agan v. PIATCO. Consequently, the Republic filed an expropriation case to acquire the terminal structure. The Regional Trial Court (RTC) issued a writ of possession and issued orders concerning the provisional release of funds to PIATCO and the intervention of PIATCO’s subcontractors, Takenaka and Asahikosan, who had obtained foreign arbitral awards against PIATCO. These RTC orders were challenged, leading to the consolidated cases at bar.

ISSUE

The core issues resolved in this Resolution on the motions for reconsideration pertain to the proper determination and distribution of just compensation in the expropriation of NAIA Terminal 3, specifically: (1) the correct valuation date for just compensation; (2) the propriety of awarding consequential damages; (3) the legal interest due on the compensation; and (4) the rights of PIATCO’s creditors, Takenaka and Asahikosan, to intervene and claim against the compensation fund.

RULING

The Court denied the motions for reconsideration and affirmed its prior Decision. On valuation, the Court held that just compensation must be determined as of the date of the filing of the expropriation complaint, December 21, 2004, as this was the date the Republic effectively took the property. This aligns with the constitutional mandate that payment must be made at the time of taking to prevent the property owner from being deprived of the property’s value. The claim for consequential damages was rejected, as such damages are not recoverable in expropriation proceedings, which are aimed at indemnifying the owner for the property’s fair market value, not for unearned profits or business losses.
Regarding interest, the Court ruled that legal interest of twelve percent (12%) per annum (as applicable at the time of taking) is due on the unpaid just compensation from the date of taking until June 30, 2013, and six percent (6%) per annum thereafter until full payment. This interest is a component of just compensation, compensating the owner for the income it would have made had it been paid the property’s value at the time of taking. Finally, the Court upheld the right of Takenaka and Asahikosan to intervene. As judgment creditors of PIATCO with foreign arbitral awards, they have a legal interest in the expropriation proceeds, which constitute a fund for the payment of PIATCO’s obligations. The trial court was directed to determine the validity and priority of their claims against the compensation deposited with it.