Unresolved issues

The Bases Conversion and Development Authority (BCDA) suffered another legal setback after a Regional Trial Court (RTC) judge “reprimanded” the agency for engaging in “selective prosecution” and violating the Constitution.

Last Dec. 19, 2014 Pasay City Judge Pedro Gutierrrez upheld his Sept. 3, 2014 decision that BCDA president Arnel Paciano Casanova had failed to establish probable cause in filing an estafa case against chairman Robert John Sobrepeña of the Camp John Hay Development Corp. after accusing Sobrepeña of making false representations that CJHDevco was incapable of paying rentals for its  247-hectare holding at the John Hay Special Economic Zone (JHSEZ).

Gutierrez said that since BCDA agreed to restructure the debt under the lease agreement, the accused (Sobrepeña) could not be held liable for CJHDevco’s failure to pay those rentals.

Gutierrez added that the case was filed with the Department of Justice only 14 years after the obligation was incurred, thus violating the constitutional rights of the accused to have a speedy trial and due process of law.

Moreover, he said that in acting on BCDA’s estafa complaint, the DOJ “made a palpable error of selective prosecution” in filing the case against Sobrepeña without including all the members of CJHDevco’s board of directors.

The court’s verdict underlines the recurring theme in the long-running feud between BCDA and CJHDevco, which is the BCDA’s repeated acts of bad faith in dealing with CJHDevco.

In fact, CJHDevco’s decision to file an arbitration case against the Philippine government lessor before the Philippine Dispute Resolution Center Inc. (PDRCI) in 2012 was prompted by BCDA’s repeated violations of its original Memorandum of Agreement (MOA) and Revised MOAs (RMOAs) with its private developer-partner at the former American military installation in Baguio City.

When BCDA was headed by now Public Works and Highways Secretary Rogelio Singson more than a decade ago, BCDA approved CJHDevco’s payment-deferral request on the understanding and recognition that its private partner had encountered financial difficulties largely because of BCDA’s repeated MOA and RMOA breaches.

The CA had upheld the earlier decision by the Baguio City RTC ordering BCDA to settle its longstanding dispute with CJHDevco over the lease and development of the JHSEZ property. It basically affirmed the July 13, 2012 order by Baguio RTC Judge Cecilia Corazon Archog ordering the BCDA to submit itself to arbitration proceedings to resolve its financial dispute with CJHDevco.

Right now, BCDA and CJHDevco are waiting for the resolution of their case at the Philippine Dispute Resolution Center Inc., as PDRCI is poised to hand out its decision any time now on issues pertaining to the lessor’s serial violations of its original MOA and subsequent RMOAs with the lessee.

Now let’s go back to the Dec. 19, 2014 ruling which was released only after Christmas.

BCDA had previously agreed to the rental payments suspension due to the financial difficulties being encountered by its private partner, part of which stemmed from external problems like the 1997 Asian financial crisis, and partly brought about by BCDA’s admitted breach of its agreements with CJHDevco. 

Despite such breaches by BCDA, Casanova still chose to file an estafa case against Sobrepeña only, for the businessman’s purportedly deliberate move to dodge the firm’s rental obligations despite its retained earnings and other revenues from the leased John Hay estate.

Judge Gutierrez said that CJHDevco was not guilty of misrepresentation because BCDA itself had acknowledged the financial woes encountered by its lessee, which were partially caused by delays or breaches of the lessor’s commitments in their MOAs and RMOAs; and the deferral of payments had been approved by a joint committee comprising officers of both CJHDevco and BCDA.

CJHDevCo adds that the supposed P3.4 billion in unpaid rentals is just a figment of Casanova’s imagination because CJHDevco is actually up to date in its payments,  and has already invested P5 billion in developmental and operational costs plus interest expenses in its leased JHSEZ property.

It emphasized that this P3.4-billion claim is illusory as it represents accumulated suspended rentals payments during the five-year period (2003-2007) when BCDA was in breach of contract after the Supreme Court revoked the SEZ status of Camp John Hay, resulting to complete stoppage of all construction and development work, and suspension of all building permits inside Camp John Hay, thereby barring CJHDevco from proceeding with site development.

The Court ruled that despite BCDA’s breaches, CJHDevco — in a sign of good faith — has thus far remitted P1.4 billion, or 40 percent of its dues to the government, even if BCDA has only delivered 21 percent of its commitments under the 1999 MOA, enabling the firm to develop just four of 25 hectares and thus severely hurting its income generation.

This setback has forced the firm to eventually request for payment deferment.

 CJHDevco has invested over P5 billion thus far in its JHSEZ venture, enabling it to complete 90 construction projects and continue working on another nine projects in its leased area.

The 90 completed projects include the Camp John Manor Hotel, Golf Clubhouse, CAP Convention Center, luxury log homes and forest cabins, a new main gate, a filling station of the Eco-Village, and two buildings of the Ayala Technohub.

CJHDevco’s ongoing projects include Phase 1 of the Camp John Hay Suites Hotel; two more Ayala Technohub facilities; assorted country estate, forest estate and golf estate lots, and two more Eco-Village lots.

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