Court orders BCDA to pay developer P1.42B


BAGUIO CITY  – The city’s Regional Trial Court (RTC) Branch 6 recently issued the much awaited writ of execution over the long standing dispute within the 247hectare John Hay Special Economic Zone (JHSEZ) ordering the State-owned Bases Conversion and Development Authority (BCDA) to pay to the Sobrepeña-owned Camp John Hay Development Corporation (CJHDevCo) the amount of P1.42 billion and in turn for the CJHDevCo to return the leased property to BCDA in tenantable condition.

In a 5-page ruling, Judge Cecilia Corazon Dulay-Archog ordered the sheriff to make a report to the court in relation to the compliance of both parties to the wrti of execution within 30 days upon the rendering of the aforesaid decision relative to the long standing John Hay dispute.

Judge Archog issued the writ of execution after both BCDA and CJHDevCo filed similar petitions for confirmation of the Arbitral Award that was rendered by the Makati-based Philippine Dispute Resolution Center, Inc. (PDRCI).

The 3-man arbitral tribunal ruled for the mutual restitution of the original lease contract and subsequent related contracts due to mutual breach of both parties on the development of the former American military base. It should be recalled that the BCDA’s claim for back rentals against CJHDevCo in the amount of P3.3 Billion was rejected by the Arbitration Tribunal due to serious breaches committed by BCDA of its obligations under the lease contract such as the clear failure to set up a functioning One Stop Action Center that would assist the developer in speedily processing required permits.

The writ states: “You (the sheriff) are commanded to demand from Respondent Bases Conversion Development Authority (BCDA), the immediate return in full of the amount of One Billion Four Hundred Twenty One Million Ninety Six Thousand Fifty Two (P 1,421,096,052.00) Pesos together with the lawful fees for service of the execution and pay the same to the petitioner CJH Development Corporation (CJHDevCo).”

The writ also commanded the sheriff to demand from petitioner CJHDevCo to vacate and turn over the property to BCDA in good and tenable condition, “reasonable wear and tear excepted.”

Contracts of third party lessees and locators, however, should be respected by BCDA and cannot be included in the Notice to Vacate issued to implement the Writ of Execution. These third parties who acted in good faith  has the right to remain in Camp John Hay based on their own right and from BCDA’s acceptance of the benefit derived from the payments made by these third parties.  The money paid by these third parties were credited in the Final Award as BCDA’s payment for the interest it owed to CJHDevCo on the rentals BCDA was ordered to return to CJHDevCo.

Alfredo Yñiguiz, CJHDevCo executive vice president and chief operating officer, said the Manor and the Forest Lodge at Camp John Hay will thus remain under the same management.

Sobrepeña Firm May Take Over Properties of BCDA

Judge Archog made it clear that the Writ of Execution must be implemented simultaneously.  The Writ provides that in the event that CJHDevCo fulfils its part but BCDA fails on its end, CJHDevCo may levy on properties of BCDA to satisfy the Arbitral Award.

The writ states: “If … respondent (BCDA) cannot return all or part of the obligation, in cash, certified bank check or other mode of payment acceptable to the petitioner (CJHDevCo), you (the sheriff) shall levy upon the properties of respondent (BCDA) of every kind and nature whatsoever which may be disposed of for value and not otherwise exempt from execution.”

The developer maintains that it is ordered to turnover portions of Camp John Hay not in the possession of third parties who purchased leasehold rights in good faith.

By Dexter A. See