BCDA ordered: Submit to arbitration on John Hay

BAGUIO CITY — A regional trial court judge here ordered the Bases Conversion Development Authority (BCDA) to submit to arbitration to resolve its long-standing dispute with Camp John Hay Development Corp. (CJHDevCo), the developer of the former American rest and recreation facility.

In a petition it filed last June, the CJHDevCo asked the court to compel the government to enter into arbitration to resolve various disputes over the lease of Camp John Hay resulting from the Supreme Court’s nullification of tax perks and financial incentives in the John Hay Special Economic Zone.

The company also asked the court to stop the BCDA from taking over leased areas of Camp John Hay.

In a 26-page decision, RTC Branch 6 Judge Ruben Ayson granted the injunctive relief, which the CJHDevCo had sought, upon the posting of a P1-million injunction bond.

With the ruling, the government-run BCDA is permanently enjoined to cease and desist from terminating and canceling the lease agreement pending arbitration.

"This comes as a relief for aggrieved businesses and investors, especially now that confidence in the country’s economy is wavering," said lawyer Ma. Georgina Alvarez, CJHDevCo senior vice president for legal and corporate services.

Ayson struck down BCDA’s arguments that its lease agreement with the CJHDevCo had been cancelled and terminated as of April 30 this year due to the company’s alleged material breaches, and that it was not bound to submit to arbitration under the lease agreement.

"The unilateral cancellation or rescission or termination of the contract due to material breach or violation of the contract by the other contracting party is always provisional, contestable, and subject to judicial determination," he said.

The BCDA also invoked Section 21 of Republic Act 7227, which provides that only the Supreme Court can restrain the conversion of military reservations into productive uses, but Ayson said this is not a blanket prohibition as the tribunal itself has ruled in several cases.

Ayson noted that the CJHDevCo has poured in billions of pesos in developing Camp John Hay.