BCDA orders locators to transact with JHMC


BAGUIO CITY  – The state-owned Bases Conversion and Development Authority (BCDA) ordered all the 118 locators within the 247-hectare John Hay Special Economic Zone (JHSEZ) to transact business with it and its subsidiary, the John Hay Management Corporation (JHMC) after the Philippine Dispute Resolution Center, Inc. ruled that the Camp John Hay Development Corporation (CJHDevCo) must turnover to the government the facility.

Lawyer Arnel Paciano D. Casanova, BCDA president and chief executive officer, said CJH investors must closely work with BCDA for the proper turnover of the special economic zone to the State immediately pursuant to the unanimous decision of the arbitration tribunal on the specific issue.

“We want the investors to now coordinate with us so we can work on an orderly transition.” Casanova stressed.

He explained whatever agreement the locators entered into with CJHDevCo no longer applies because their sub-lessees have been terminated with the principal lease that was extinguished by the arbitration tribunal.

Casanova defended the presence of a huge number of members of the Special Weapons and Tactics (SWAT) teams around the leased premises as they simply want to protect the security inside the facility and prevent alleged sabotage, pilferage and the destruction of properties.

He opined CJHDevCo no longer has the legal authority to do business within the zone, thus, locators are mandated to transact business with the government to prevent confusions in the future.

“While we see this as a breakthrough, we are duty-bound to pursue our monetary claims of P3.3 billion against the developer because 25 percent of our earnings from John Hay is meant for its stakeholders, particularly the city government which is the supposed recipient of the share from the lease rentals,” Casanova said.

Casanova used the dissenting opinion of co-arbiter Teodoro Kalaw IV which stated that “CJHDevCo did not pay the BCDA its lease rentals and its arrears have ballooned to over P3.4 billion of which 25 percent could have gone to the city government” as a reason for the BCDA’s legal team to study their future legal options.

In a separate opinion, Kalaw said the developer should pay rentals and arrears amounting to P2.4 billion, considering that CJHDevCo has acknowledged to owe BCDA at the time of the execution of the July 2008 revised agreement.

In a decision dated 30 September 204, the Court of Appeals (CA) agreed with the BCDA’s position that “it is the public that suffers for the failure of CJHDevCo to fulfil its obligations.”

The BCDA official expressed confidence that the case will not drag on and that there will be a smooth transition although they will contest the award of P1.42 billion to the developer representing damages and lease rentals paid during the 18-year lease of the special economic zone.

According to him, the unanimity of the arbitrators in mandating CJHDevCo to immediately turnover the facility and its improvements to BCDA warrants the immediacy of the turnover while the split decision of the arbitrators on BCDA’s obligation to pay P1.42 billion to the developer is worth studying because of other available legal options to compel the embattled developer to pay its accumulated lease rentals and arrears among others.

Before BCDA will pay CJHDevCo with the P1.42 billion award, Casanova asserted the developer must ensure or make a commitment that the funds will be used to pay his sub-lessees and locators considering that they have existed sellers in bad faith among other serious allegations of fraud and double sale of properties within the zone.

He assured that BCDA will continuously conduct consultations with the affected locators and sub-lessees in order to iron out the smooth turnover of the facility once the city’s Regional Trial Court (RTC) shall have issued the required judicial confirmation and writ of execution on the decision of the arbitration tribunal.

Casanova said BCDA will study all the available contracts entered into between the developer and its locators and sub-lessees to determine who among them are in good faith so that their rights and privileges in using the camp will be protected by the government once it takes over the facility the soonest.

The arbitration will be submitted by the PDRCI to the RTC Branch 6 of Baguio City which is handling the case for the subsequent issuance of the judicial confirmation to the decision and the writ of execution for both parties to comply with their respective obligations under the 274-page decision.

By Dexter A. See