BCDA tells SC: CA's Camp John Hay ruling irregular, disadvantageous to gov't

The state-owned Bases Conversion and Development Authority (BCDA) has warned the Supreme Court that the Philippine government stand to lose billions of pesos in revenues due to a Court of Appeals ruling on Camp John Hay in Baguio City.

 

In a petition for certiorari, the BCDA said the CA's July 30 ruling penned by Associate Justice Noel Tijam was "highly irregular and disadvantageous to the government" when it reversed and modified a decision of the Arbitral Tribunal of the Philippine Dispute Resolution Center last February that ordered the private CJH Development Corporation (CJHDevCo) to vacate Camp John Hay and deliver leased property including new constructions and permanent improvements to BCDA.

 

The CA, in its 67-page decision, also ordered the BCDA to return P1.42 billion to CJHDevCO, which the latter paid to the BCDA as lease payments.

 

But in its plea, the BCDA said the "injury [caused by the CA ruling] to BCDA is grave."

 

"Because it was ordered to return the rentals paid by CJH DevCo, and because CJH DevCo was allowed to retain the moneys it already collected in advance from its sub-lessees, BCDA will have received no income from its property for the past 19 years and will receive no benefit for the next 31 years," read the petition.

 

"Ultimately, it is the nation that suffers, as the benefits to be derived from the development of Camp John Hay are intended to promote the economic and social development of the country in general," it added.

 

The BCDA asked the SC to "declare that CJH Development Corporation’s obligation to vacate the Leased Property is immediate and not contingent on BCDA’s payment of P1,421,096,052.00."

 

The BCDA also wanted the SC to "order CJH Development Corporation and all persons claiming rights under it, including all the respondents in these cases, to immediately vacate the Leased Premises and promptly deliver it to the Bases Conversion and Development Authority, 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, in good and tenantable condition in all respects, reasonable wear and tear excepted."

 

'Patently erroneous'

 

BCDA head for legal services lawyer Peter Paul Andrew Flores branded the CA ruling as "patently erroneous" and expressed confidence it would be struck down by the SC.

 

"Public interest will eventually prevail,” Flores said, adding that should the CA decision be enforced, the government would not benefit because the sublessees have already paid their lease to CJHDevCo until 2046.

 

The structures would be worthless by the time these are turned over to the BCDA in 2046 because the useable life of a building is only about 50 years, he said.

 

“The government has not earned anything from the Camp John Hay lease since 1997 and the government will not earn anything while (the Sobrepeña group, which operates and manages Camp John Hay) continues to exploit and profit from the use of government property until 2046. Where is the justice in that?” Flores said.

 

Last March, the Baguio Regional Trial Court had issued a decision for the final award to make the arbitral tribunal decision binding, executory and non-appealable and a writ of execution.

 

The CJHDevCo, however, was later able to secure a 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 CA ruling 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. The state-owned firm claimed this "effectively rendered the arbitral award empty."

 

The BCDA, which was supposed to recover all new construction and permanent improvements as stated in the final award, said it would end up getting nothing.

 

In its ruling, the CA 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.

 

The BCDA claimed the 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. —ALG, GMA News