CA voids Phl-Japan deal on Nampeidai property dev’t

MANILA, Philippines - The Court of Appeals (CA) has voided a contract between the Philippine government and Japanese consortium Nagayama Taisei Corp. (NTC) for the development of the controversial Nampeidai property in Tokyo.

In a 35-page decision released last Friday, the special First Division of the appellate court nullified the June 21, 2011 ruling of Pasay City regional trial court that directed the government to proceed with the deal with Masahiro Nagayama, who claimed to be the lead partner and manager of NTC.

The CA also voided the notice of award issued in favor of the NTC on Oct. 15, 2005, as well as the writ of execution issued by the Pasay RTC Branch 108 on April 2, 2012 for the implementation of the project.

Instead, the court reaffirmed the notice issued on June 11, 2009 by the government canceling its award of the project to NTC.

The CA agreed with the Office of the Solicitor General that the deal was invalid for two reasons: non-existence of NTC and violation of provisions of Republic Act 9184 (Government Procurement Reform Law).

The court specifically cited the failure of the consortium to comply with the requirement for the submission of a sworn undertaking, which also violated RA 9184 and the terms of reference for the development of the Philippine government properties in Japan.

The CA pointed out the Department of Finance (DOF) was correct in canceling the notice of award that it issued to NTC.

The government made the cancellation after it was established that the documents submitted by the winning bidder NTC were falsified.

It noted that Taisei Corp., through its chief manager Shigeru Ikemoto, wrote the government denying participation in the formation of the NTC and in the bidding for the development of the property.

“Records are replete, with evidence to establish that Taisei Corp. had no knowledge of, much less agreed to, being part of the NTC, and that accordingly, the signatures of its supposed representatives in the consortium have been forged,” the CA explained.

The CA also declared as void the Service Development Agreement (SDA) for the enforcement of the project that was executed by the government in favor of the NTC on Aug. 14, 2006.

“Verily, a valid SDA necessitates a valid notice of award, which in turn requires a properly conducted bidding process from which a qualified bidder emerges. The same cannot be said in this case, as the NTC is fictitious consortium with no authority nor capacity to perform acts with legal effect,” the decision stated.

But in voiding the deal, which covers development and lease for a period of 50 years, the CA directed the government to return to Masaichi Tsuchiya, attorney-in-fact of the NTC, the service development fee in the amount of 480 million yen, with legal interest at six percent per annum.

It also cancelled and ordered released to Tsuchiya or any of his representatives the performance bond in the amount of P50.23 million.

The 2,489-square meter Nampeidai property is one of the three Philippine properties in Japan that have been offered to investors under a build-operate-transfer scheme.