STATE-RUN Bases Conversion and Development Authority (BCDA) has asked the Supreme Court to review a Court of Appeals ruling reversing an order issued by an arbitration body for lessee CJH Development Corp. (CJHDevCo) to vacate Camp John Hay.
The BCDA, which is mandated to transform former US military bases into alternative productive civilian use, views the ruling as “disadvantageous to the government” and has filed an appeal.
“We filed for certiorari in the Supreme Court,” Arnel Paciano Casanova, president and chief executive of BCDA said.
In a 67-page decision, the CA under Associate Justice Noel Tijam reversed an order of the Arbitral Tribunal of the Philippine Dispute Resolution Centre in February directing CJHDevCo to vacate Camp John Hay.
Tijam modified the final award declaring CJHDevCo’s obligation to vacate and deliver the leased property to BCDA as dependent on BCDA’s payment of P1.4 billion, which effectively rendered the arbitral award empty, the BCDA said.
The BCDA, which was supposed to recover all new construction and permanent improvements as stated in the final award, will get nothing.
Tijam also ruled that sub-lessees should not be evicted, contrary to the admission of Camp John Hay that its contractual relationship with the so-called “third parties” was a sublease.
Cassanova said Tijam’s decision was “grossly disadvantageous to the government.”
Earlier, the court-ordered arbitration committee ordered CJHDevco to vacate Camp John Hay and return the property to the BCDA.
The arbitration committee, composed of Mario E. Valderrama, Teodoro Kalaw IV and Rogelio C. Nicandro, in a decision dated Feb 11, 2015 called for an orderly transition of the country’s prime resort development.
The BCDA also called on investors in Camp John Hay to work with it for the proper development of the former US military facility.
CJHDevco has not been paying the BCDA lease rentals and its arrears have ballooned to over P3.4 billion, 25 percent of which, or P850 million, should have gone to the local governments of Baguio, La Trinidad, Itogon, Sablan, Tuba and Tublay.
Casanova said that the BCDA will still run after CJHDevco to pay for the use of the facility for over a decade and from which it has earned billions.
In a decision dated September 30, 2014, the Court of Appeals agreed with the BCDA’s position that “it is the public that suffers for the failure of CJHDevco to fulfill its obligations . . .”
BCDA head for legal services lawyer Peter Paul Andrew Flores also said based on the merits of the case, the BCDA is confident that the patently erroneous CA decision will not succeed in the SC. “Public interest will eventually prevail,” Flores said.
He said that should the CA decision be enforced, government will not benefit because the sub-lessees have already paid their lease to CJHDevCo until 2046.
The structures will be worthless by the time these are turned over to the BCDA in 2046 as the usable life of a building is only about 50 years, he said.
Earlier, the Baguio Regional Trial Court issued a decision for the final award to make the tribunal decision binding, executory and non-appealable and a writ of execution.
However, the CJHDevCo was able to secure a Temporary Restraining Order (TRO) from the CA and the CA eventually issued a decision not only stopping the implementation of the final award but also modifying it.
The BCDA said CJHDevCo may have misled sub-lessees into believing that they were not affected by the final award.
The BCDA said since the start of the lease of government property to CJHDevCo, from 1998 to 2000, CJHDevCo fraudulently paid more than P1.274 billion as dividends and advances to its stockholders and affiliates, but told BCDA that it was financially incapacitated to defer rental payments of at least P1.275 billion during the same period.