COA junks P1.4-B rental claim of Camp John Hay developer vs. BCDA

The Commission on Audit (COA) has dismissed the petition for money claim of Camp John Hay Development Corporation (CJHDC) against the Bases Conversion and Development Authority (BCDA) worth at least P1.4 billion in rental payments.

In a nine-page decision, COA junked the CJHDC petition for "lack of jurisdiction, without prejudice to its refiling upon final determination by the Supreme Court of the rights and obligations of the contracting parties."

In 1996, the BCDA entered a lease agreement with CJHDC, Fil-Estate Management, Inc., and Penta Capital Investment Corporation for the development of 247 hectares of property within Camp John Hay in Baguio City.

The lease agreement allows the developers to operate and manage the leased property for 25 years —extendable for another 25 years — for a fixed annual rate of P425 million for the first five years and P150 million for the sixth year onwards.

After a year of payment, CJHDC repeatedly requested for the deferment of its rental payments after the first annual rent due to financial incapacity.

The parties then entered a restructing memorandum of agreement (RMOA) in 2008 where CJHDC aknowledged its standing rent worth P2.69 billion.

However, the CJHDC alleged that BCDA failed to deliver the Baguio City property with the "investor-friendly incentives and advantages of a special economic zone."

This development forced CJHDC to file a case before the Philippine Dispute Resolution Center, Inc. (PDRCI) and the Regional Trial Court (RTC)-Branch 6 in Baguio City. The PDRCI ruled in 2015 that both parties violated the original lease agreement and the RMOA.

The tribunal also ordered CJHDC to vacate the leased premises and deliver the leased property including the improvements to BCDA and for the BCDA to return to CJHDC the total amount of P1.4 billion in rental claims. The RTC affirmed the PDRCI ruling.

In a separate decision, the Court of Appeals ordered CJHDC to vacate and cease operations on the leased premises upon payment by BCDA of its claim and that BCDA cannot take possession of the constructions and improvements once occupied by the developer.

However, COA said the claim of CJHDC is outside its jurisdiction even if the developer was able to establish its entitlement to the claim.

"CJHDC’s entitlement to the award may have been clearly established in this case because of the rescission of the Lease Agreement and the RMOA," the COA decision read.

"However, whether the obligation to return what has been received from each other is fulfilled simultaneously or contingent upon one’s performance of its obligation is outside the jurisdiction of this Commission," it added.

The BCDA has a pending petition for review on certiorari before the Supreme Court. — MDM, GMA News