Court orders BCDA to pay developer P1.42 billion

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BAGUIO CITY – The city’s Regional Trial Court (RTC) Tuesday upheld the arbitral tribunal decision of the Makati-based Philippine Dispute Resolution Center, Inc. (PDRCI) granting a monetary reward of P142 billion to the Sobrepeña-owned Camp John Hay Development Corporation (CJHDevCo) by the State-owned Bases Conversion and Development Authority (BCDA).

In a 7-page decision issued last March 27, 2015, Judge Cecilia Corazon Dulay Archog of the RTC Branch 6 here rendered judgment confirming the Final Award by the PDRCI to CJHDEVCO ordering BCDA to return to CJHDEVCO the total amount of rentals CJHDEVCO has paid in the total amount of PHP1,421,096,052.00.  Judge Archog likewise confirmed the PDRCI ruling that CJHDEVCO is not liable for any unpaid back rent consistent with the ruling that rescission and mutual restitution is proper in the case.

The decision of Judge Dulay-Archog stated that the PDRCI’s Final Award is clear and needs no further interpretation by the court.

The court also ruled that the vested right holders — the existing locators, sub-lessees, unit owners, lot owners and golf club members who acquired their interests in good faith – will be governed by the law on obligations and contracts.

With the confirmation of the final award as stated in the PDRCI arbitral decision and with the finding of the arbitral tribunal that both parties are at fault and that their respective faults cancel each other such that both parties should be considered in good faith, Judge Archog declared the writ of preliminary injunction she issued on 23 August 2012 is lifted and rendered in effective.

She ordered the issuance of an entry of judgement of the decision and the subsequent issuance of a writ of execution for both parties to comply with their respective obligations under the arbitral tribunal ruling.

Earlier, the PDRCI ruled in a 280page decision dated 11 February 2015 that the original lease agreement, the subsequent memorandums of agreement and the restructuring memorandum of agreement of 2008 between BCDA and the developer rescinded due to the mutual breach of the parties to the said agreements.

“The parties are hereby reverted as far as practicable to their original positions prior to the execution of the original lease agreement,” the PDRCI ruling stated.

The PDRCI ordered CJHDevCo to vacate the leased premises and promptly deliver the leased property, inclusive of all new constructions and permanent improvements introduced during the term of the lease as reckoned from the execution of the original lease agreement, to BCDA in good and tenantable condition in all respects, reasonable wear and tear excepted.

“This statement of Judge Archog confirms our legal position that the arbitral award did not carry with it the order for our locators, sub-lessees, units owners, lot owners and golf club members to vacate as well, but that their vested rights are to be protected by law,” said CHDEVCO’s Chief Operating Officer, Mr. Alfredo Yniguez, when requested to comment over the RTC’s decision.  “Article 1385 of the Civil Code, which is the law relied upon by the vested rights holders, provides that an “order for mutual restitution”, as in this case, cannot include properties currently in the possession of third persons who acted in good faith,” stressed by Mr. Yniguez.

Mr. Yniguez stated that with this ruling by the Baguio RTC recognizing that there are vested right holders in the Camp, BCDA cannot just evict the vested right holders nor order them to vacate without their due process afforded to them by the laws on obligations and contract.

Archog stated the court is not authorized to revise, interpret or in any way encroach upon the work of the arbitral tribunal except to act on specific grounds to vacate an award which does not exist in the case.

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