On Negros Occ property, Court junks SM Prime case vs Ayala contracts

BACOLOD CITY, Philippines — After two years and six months, the court denied the petition for certiorari of SM Prime Holdings Inc. (SMPHI) seeking to nullify the signed contracts between Ayala Land Inc. (ALI) and the provincial government of Negros Occidental on the sale and lease of  its 7.7-hectare prime property in this city.

Negros Occidental Regional Trial Court-Branch 50 Judge Estefanio Libutan Jr. denied SMPHI’s petition for “lack of  merit,” declaring that it found “no evidence to prove that the Capitol’s committee on awards and disposal of  real properties had abused its discretion in an arbitrary and despotic manner” in granting the contracts to ALI.

On July 13, 2011, SMPHI asked the court to nullify the committee’s resolution, contending that there was a failure of bidding, and thus name instead the winning bidder.

Libutan, in his 22-page decision, dated Jan. 23, 2014, said the acts of the awards committee—before, during and after the July 7, 2011 bidding, including the negotiation with ALI—are “all in accordance with law, prevailing COA (Commission on Audit) circulars and settled jurisprudence.”

The committee “ought to be commended for protecting the interest of the province,” Libutan said, adding that it was good the panel declared a failure in the bidding and proceeded with a negotiated sale.

In the subsequent bidding, SMPHI refused to participate in, the committee awarded the deed of conditional sale and the contract of lease to ALI, which by then offered to buy the properties at P20,500 per square meter, or P1,000 more than the floor price.

The court denied SMPHI’s argument for the voiding of the contracts, due to alleged non-disclosure of the floor price before the bidding, because the Commission on Audit, in its Sept. 21, 2013 decision, stated that there is no law requiring such disclosure before the bidding.

Governor Alfredo Marañon Jr., in a press conference last Feb. 3 when his office received a copy of the court order, told reporters: “We finally won.”

The court decision paves the way for ALI to finally begin its multi-billion peso development of the property, located adjacent to the Provincial Capitol building, Marañon said. —(FREEMAN)