The CJH Development Corporation has filed with the Regional Trial Court of Baguio City a petition for the confirmation against the Bases Conversion Development Authority of the P1.42 billion money awarded to the developer by the Philippine Dispute Resolution Center Inc.
In a petition for confirmation of final award by PDRCI, the former camp’s developer also asked the court to enter judgment in accordance with the award, issue the writ of execution for the P1.42 billion money award and appoint a commissioner to oversee the turn-over of the leased property to the BCDA after BCDA pays the P1.42 billion money award to the developer of the former American recreational facility.
CJHDEVCO also submitted to the court a list of third parties with vested rights in the leased property.
“BCDA is expected to continue to honor and respect all the rights and interests of third parties, such as locators, sub-lessees, unit owners, lot owners and golf club members since they acquired their interests in good faith and are not covered by the arbitral award to vacate,” said Mr. Alfredo Yniguez, COO of CJHDEVCO, in a statement.
The PDRCI final award rendered last February 11, 2015 adjudged CJHDEVCO as not liable for the P3.3 billion back rental claimed by BCDA and instead ordered BCDA to pay CJHDEVCO by way of damages for breach of contract, P1.42 billion, effectively returning to CJHDEVCO all rental payments for the former American rest and recreation center since 1997.
“The decision of PDRCI is a vindication of our position that we do not owe BCDA any rentals,” said Yniguez.
“PDRCI also confirmed our position that we are the aggrieved party in the relationship with BCDA, and for this reason, awarded our prayer for damages which PDRCI set at P1.42 billion,” said Mr. Yniguez.
The filing of the petition confirms CJHDEVCO’s earlier commitment to abide by the Final Award of the PDRCI.
The arbitral body earlier ordered the BCDA to pay P 1.42 billion to CJHDEVCO, representing rental payments made by CJHDEVCO to BCDA since 1998.
In its 274-page Final Award, the three-man PDRCI also declared CJHDEVCO as “not liable for any unpaid back rent” after it found both the BCDA and CJHDEVCO of mutually committing breach of their contractual obligations, in connection with the development of the Camp John Hay in Baguio City.
“The Original Lease Agreement, the subsequent Memorandums of Agreement and the Restructuring Memorandum of Agreement of 2008 are hereby rescinded due to the mutual breach thereof by the parties. The parties are hereby reverted as far as practicable to their original position prior to the execution of the Original Lease Agreement,” the PDRCI ruling stated.
The PDRCI stressed that BCDA failed to comply with its obligation of setting up a One-Stop Action Center, which would have been an effective mechanism to facilitate development of the John Hay Special Economic Zone.
“It is undeniable that the OSAC which the BCDA claims to have established in compliance with the 2008 restructured memorandum of agreement (RMOA), was unable to perform its warranties. For one, the OSAC was manifestly not fully authorized to process and issue developmental permits, such as tree-cutting, earth balling, and tree-pruning permits,” the arbitration body said in its ruling.
The PDRCI also noted that BCDA failed to issue business permits even after the execution of the RMOA in 2008.
“From a review of the evidence submitted by the parties, this tribunal is not inclined to accept the reasons put forward by BCDA that allegedly justify why these permits could not be timely issued.”
“For instance, on the matter of the renewal of the building permit of Camp John Hay Suites Hotel, BCDA claims that the 5-storey Suites Hotel violated the 4-storey height restriction. However, there is evidence to show that it did not enforce the supposed 4-storey height restriction with respect to the 7-storey Monet Hotel,” the PDRCI said.
The tribunal also denied BCDA’s plea for Camp John Hay Development Corporation (CJHDEVCO) to cough up P3.3 billion in supposedly unpaid rentals.
“The Claimant (CJHDEVCO) is ordered to vacate the Leased Premises and promptly deliver the Leased Property, inclusive of all new constructions including permanent improvements introduced during the term of the Lease as reckoned from the execution of the Original Lease Agreement, to Respondent in good and tenantable condition in all respects, reasonable wear and tear excepted,” the arbitral decision stressed.
“The Respondent (BCDA) is ordered to return to Claimant (CJHDEVCO) the total amount of rentals Claimant has paid in the total amount of Php1,421,096,052.00,” the PDRCI said, adding “Claimant is hereby declared as not liable for any unpaid back rent consistent with the ruling that rescission and mutual restitution is proper in this case.”
In January 2012, CJH DEVCO filed a complaint for arbitration against BCDA seeking to confirm the validity of its decision to rescind the RMOA for the government agency’s alleged “failures and breaches.”
In a 42-page complaint filed with the PDRCI, CJHDEVCO through lawyer Gilbert Raymund Reyes, also asked the Arbitral Tribunal that in the event that amendment of the RMOA is no longer possible, it should order the original lease agreement between CJHDEVCO and BCDA as “deemed rescinded.”
The RMOA covered the 2008 compromise settlement entered into by BCDA and CJHDEVCO where the latter agreed to several substantial concessions, including the assumption of “prior rental obligations” amounting to more than P2.69 billion and current rental of P150 million.
In exchange, BCDA was tasked to set up the OSAC to enable the CJHDEVCO to meet these massive financial obligations.