Prime Orion to re-appeal SC final ruling

Prime Orion Philippines Inc. (POPI) said it will re-appeal the final ruling of the Supreme Court nullifying the joint venture agreement between the Public Estates Authority (PEA) and the Amari Coastal Bay Development Corp. to develop 153 hectares of land reclaimed from Manila Bay.

The SC declared as null and void the amended joint venture agreement (AJVA) of PEA and Amari, now known as Central Bay Development Corp., for alleged violation of the constitutional provision prohibiting private corporations to own land of public domain without going through a public bidding.

"We believe we have a strong case and given the opportunity to appeal again and be accorded the opportunity to orally argue our case, the remaining justices will be convinced that the AJVA is legal and is good for the economy and the country," POPI said in a statement to the Philippine Stock Exchange.

POPI said seven of the 14 justices found merit in its position and reversed their original decision despite the SC’s continuous denial of the company’s motion for orgal argument, in violation of its right to due process.

POPI, formerly Guoco Holdings Inc., a stakeholder in the project, said the nullification of the agreement would cause irreparable losses to its shareholders and foreign partners who have invested their funds in the project, relying in the good faith on the review and approvals by the government.

Management said the ruling heightened the negative perception of investors with regard to policies of government on investments.

"This puts into question the very sanctity of the contracts entered into by the Philippine government and may cause the overall confidence of the investing public and foreign investors to erode," POPI said.

"As a publicly-listed company, which comprises many foreign and local shareholders, it is incumbent upon us to exert utmost prudence in our investments. In the case of the Cyber Bay project, all the laws pertinent to the execution of the contract as presented to us by the government have been complied with," POPI said.

The ruling stemmed from a Dec. 1998 petition by former Solicitor General Francisco Chavez seeking to nullify PEA’s sale to Amari of 77.34 hectares of still submerged areas of Manila Bay.

The SC ruled that the submerged areas "remain inalienable natural resources of the public domain" and their sale to Amari violated the constitutional injunction on selling the country’s natural resources, like public land, to foreigners. Amari is an Italian-Thai consortium.

Because of the ruling, PEA has to figure out how to raise money to compensate its joint venture development partners, complete the development of reclaimed lands as well as projects that were halted.

If the ruling were to be applied to all other reclamation projects undertaken up to the Marcos administration, PEA estimated it would cost the government up to P200 billion to compensate developers and investors, who were likewise paid with reclaimed land.

The government stands to lose P1.8 billion in real estate taxes yearly if the lands were taken back, PEA argued.

Government agencies and local governments that paid private contractors, investors and developers with reclaimed land would also be adversely affected by the ruling, PEA added.

In the case of Amari, PEA argued that the reclaimed Manila Bay land, known as Freedom Islands, were not public land because they were reclaimed by and acquired from a state-run company, Construction and Development Corporation of the Philippines (now Philippine National Construction Corp.) in 1981.