Report: PH did not only pay $7-M to foreign lawyers but also shouldered China’s deposit at PCA

  • The Philippine government allegedly paid $7-M to international lawyers who represented the country before the PCA
  • The amount was the final figure reached after a series of negotiations to adjust the ceiling price
  • It also shouldered the deposit which China, who refused to participate in the proceedings, failed to pay

MANILA, Philippines – The Philippine government supposedly paid $7-million to Foley Hoag LLP, the Boston-based legal firm whose topnotch lawyers represented the country in the controversial arbitration case against China.

The international team of legal experts from Foley Hoag who argued the Philippines case before the Permanent Court of Arbitration (PCA) in The Hague, Netherlands was led by Paul S. Reichler.

Reichler is joined by Lawrence H. Martin, Professor Bernard H. Oxman, Professor Philippe Sands QC, and Professor Alan Boyle, all respected legal luminaries in the international community.

According to investigative journalist Ellen Tordesillas of Vera Files, the Aquino government paid $7-M (approximately P330,370,000) to Foley Hoag which was the third ceiling price agreed upon after a series of negotiations.

Series of adjustment of fees

The original contract fee was said to have been agreed at $4,212,000 signed by then Solicitor General and now Supreme Court Associate Justice Francis Jardeleza and Paul S. Reichler of Foley Hoag in December 2012.

Citing sources, Tordesillas said it was adjusted to $5,870,000 in July 2015 under a supplemental agreement that would “cover all legal services and expenses through the end of the oral hearings on the merits of the Philippines claim.”

Foley Hoag allegedly sought another adjustment of the ceiling price in December 2015, but only became necessary after Taiwan came into the picture arguing the case for Ito Aba. The additional cost would cover “numerous scholarly works in Chinese” that needs research, translation and defense before the tribunal.

PH paid China’s share of deposit

But Tordesillas said the Philippines did not only shell out $7-M in lawyer’s fees in the two-and-a-half year maritime arbitration, but was also compelled to shoulder China’s share of the deposits at PCA.

Tordesillas cited a passage in the Award of the Tribunal that says: “While the Philippines paid its share of the deposit within the time limit granted on each occasion, China has made no payments toward the deposit.”

As per the PCA’s rule, parties in the disputes are required “to deposit equal amounts as advances for the costs of the arbitration to cover the fees and expenses of members of the Tribunal, Registry, and experts appointed to assist the Tribunal.”

Should one party fail to pay the deposit within 45 days, the Tribunal must inform the other to make the payment.

“Having been informed of China’s failure to pay, the Philippines paid China’s share of the deposit,” it added.

The deposit would also cover, among others, expenses like hearings, meetings and information technology support.

While the amount paid by the Philippines as deposit in behalf of China (who refused to participate in the proceedings) was not disclosed, the unspent balance of which will be returned after the decision is handed down.

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