Camp John Hay Development Corporation (CJHDevCo) on Friday filed an arbitration case against the BCDA asking it to honor its contractual warranties or pay P10.9 billion in damages.
"This case is about credibility, fairness and decency," said CJH DevCo in the suit filed with the Philippine Dispute Resolution Center Inc. in Pasig City. "When the government promises something to induce a private party to enter into a contract with it, that private party should be assured that the government’s word can be trusted."
CJHDevCo senior vice president for Legal and Corporate Services lawyer Ma. Georgina Alvarez insists that their case against the BCDA stems from the repeated failure of the government to convene a joint committee to settle disputes as embodied in their lease contract.
It was also spurred, explained Alvarez, by the government’s refusal to safeguard business entities operating in the John Hay Special Economic Zone from the adverse effect of a Supreme Court ruling nullifying tax and other financial incentives in the zone.
The government, through the BCDA, offered a five percent tax incentive to private sector developers in 1996 in lieu of all taxes to entice them to develop Camp John Hay.
The facility was vacated in 1991 by the Americans after the expiration of the US-RP Military Bases Agreement.
CJHDevCo took up the challenge and infused capital and other investments into the former rest and recreation facility of the Americans. However, after less than ten years, the tax and financial incentives guaranteed by the government were nullified by a Supreme Court decision in 2003 and affirmed in March this year, Alvarez lamented.
"It should be noted that CJHDevCo was, at that point, in good and current standing with respect to the lease rental payments under the 18 July 2003 MOA," Alvarez stressed.
Efforts at resolving the situation through the convening of a joint committee as provided under the lease agreement were ignored by BCDA in at least three occasions, Alvarez claimed.
Most of the business enterprises at the JHSEZ last week joined hands with CJH DevCo in pressing the BCDA to honor its promises.
CJHDevCo is seeking a total of P10.89 billion in actual damages and lost profits and P20 million in attorney’s fees and cost of arbitration.