Following extensive discussion of the World Bank arbitration tribunal’s decision received on August 17, the Fraport AG executive board is examining possible…
Following extensive discussion of the World Bank arbitration tribunal’s decision received on August 17, the Fraport AG executive board is examining possible further legal steps and is considering to apply for annulment of this decision.
Only two of the three tribunal judges hold the view that Fraport’s involvement in the Manila project is not protected under the German-Philippines Investment Guarantee Treaty and, thus, that the tribunal court does not have jurisdiction for this case – citing that the so-called anti-dummy law was vilotated in 1999. Under this Philippine law, foreigners are prohibited from exercising any management influence in so-called public utility companies.
In a comprehensive 24-page dissenting opinion on the decision, one of the three judges stated as one reason for his opposing view that the anti-dummy law (which applies to public utilities) could not possibly apply to the case at issue – because the Philippine Supreme Court had declared the concession agreements for constructing and operating the new terminal at Manila Airport “null and void” from the start. The arbitration court was bound to this decision. In the absence of a concession, there was no public utility; hence violation of the corresponding law was impossible.
The court explicitly stated that there was “no successful party“ and therefore each party must pay its own costs of the proceedings.
Fraport adheres to its position that it did not violate Philippine law. All concluded agreements were drawn up together with Philippine and international law firms.
After carefully evaluating the more than 200-page long decision, Fraport currently believes that essential documents presented at the proceedings, as well as argumentations and other aspects submitted by Fraport, were not or insufficiently taken into consideration by the court. Therefore, Fraport’s executive board is examining all legal options, including application for annulment. If sucessful, a possible plea for annulment could lead to the arbitration procedure being restarted – whereby Fraport is claiming compensation of well over $400 million from the Philippine government for expropriation of the Manila terminal.
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