World Bank Accepts Fraport AG's Request for Arbitration Against the Philippine Government

FRANKFURT/MAIN (Germany) 13th October (PROTEXT/ots) - FSE:FRA - The World Bank's International Centre for Settlement ofInvestment Disputes (ICSID) has registered Fraport AG's "Requestfor Arbitration" against the Government of the Philippines.Fraport is demanding more than $425 million of compensationarising from the Philippine government's expropriation andunfair and inequitable treatment of Fraport's investment in anew passenger terminal (IPT3) built at Ninoy AquinoInternational Airport (NAIA) in Manila, the Philippines.Fraport's arbitration request comes only after more than sixmonths of discussions with the Philippine government failed toproduce any offer by the Philippine government to compensateFraport for its investment of more than $425 million. Fraportlodged its "Request for Arbitration" in September 2003.Registration of the request by the ICSID means that thearbitration initiated by Fraport shall now proceed toward theultimate resolution of the dispute.

The ICSID was established by international treaty -signed by137 countries including Germany and the Philippines - toestablish an impartial forum for adjudicating claims forexpropriation and unfair and inequitable treatment of foreigninvestments, as occurred to Fraport. Germany and the Philippineshave entered into a bilateral investment treaty (BIT). The BITallows for disputes such as Fraport's to be settled byarbitration before the ICSID. Fraport has been advised by itslegal counsel that it has an extremely strong case. Fraportexpects to prove to the satisfaction of the arbitration tribunalthat it is entitled to the more than $425 million in damages.

Fraport's investment dispute in the Philippines continues toattract growing international concern and scrutiny. Forexample, the U.S. Department of Commerce highlighted theinequitable treatment experienced by Fraport in its recentlypublished Country Commercial Guide on the Philippines 2004. Thisreport states that "the judicial system has intervened incommercial issues with dire impact for the private sector. Thismost recently happened in May 2003 when the Supreme Court ruledto overturn the contract to build a new international airport(terminal) awarded to PIATCO, a Philippine-German consortium".Commenting on the investment climate in the Philippines, thereport also says that the "Supreme Court decision to nullify theBuild-Operate- Transfer (BOT) contract for the construction andoperation of a new terminal at Manila International Airport is atroubling example of the vagueness of the Philippine legalsystem".

ots Original Text Service: Fraport AG Internet:http://www.presseportal.de

For More Information, Please Contact: Fraport AG FrankfurtAirport Services Worldwide Attn: Robert A. Payne - ManagerInternational Press 60547 Frankfurt am Main, Germany Tel.: +49 69690 -78547 Fax: +49 69 690 -60548 E-Mail: r.payne@fraport.deInternet: www.fraport.com

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