BAGUIO CITY – The former Special 5th Division of the Court of Appeals (CA) Thursday ordered the city’s Regional Trial Court (RTC) Branch 6 under Judge Cecilia Corazon Dulay-Archog, the Ex-Official Sheriff of the city, Atty. Linda Montes-Loloy, Sheriff of RTC Branch 6, Bobby Galano and the State-owned Bases Conversion and Development Authority (BCDA) to permanently cease and desist from enforcing and implementing the April 14, 2015 writ of execution and April 20, 2015 notice to vacate that it previously issued against the Camp John Hay Development Corporation (CJHDevCo) until the latter shall have been fully paid of its monetary award amounting to P1.42 billion pursuant to the February 11, 2015 arbitral decision of the Makati-based Philippine Dispute Resolution Center, Inc..
In a 69-page unanimous decision, Associate Justices Noel Tijam, Myra Garcia-Fernandez and Victoria Isabel Paredes stated ‘we cannot require CJHDevCo to vacate the leased property without any certainty as to when the amount of P1.42 billion will be paid.”
However, pending the filing of the claim with the Commission on Audit (COA) and the payment thereof to the developer, the latter cannot be forced to vacate the leased property, consistent with the principle of mutual restitution as enshrined in the arbitral decision.
Clearly, the CA pointed out rescission under Article 1191, which serves as the bedrock for the arbitral award, is predicated upon the reciprocity of the obligations of the parties and that they are to be performed simultaneously such that the performance of one is conditioned upon the simultaneous fulfilment of the other.
The appellate court also permanently stopped the local court in its sheriff from enforcing the writ of execution and notice to vacate against third parties-interventions in the case, namely CJH Golf Club, Inc., CAP Trade and Cultural Center, Inc. and more than 50 buyers of country homes, condominium units and the Manor Hotel and Suites or Forest Lodge, forest cabins, log homes and forest estates until their respective rights and interests are determined under compulsory arbitration or by the regular courts.
“Due process dictates that a court decision can only bind a party to the litigation and not against innocent third parties,” a portion of the CA decision stated.
“The final award did not make any categorical or unequivocal statement that the final award should be enforced against the third parties. It merely settled the dispute between CJHDevCo and BCDA. It cannot be deemed to include, even by implication, third parties who were not parties to the arbitration and over which the arbitral tribunal had no jurisdiction,” the CA ruling added.
“It is therefore grave abuse of discretion on the part of public respondent judge to adjudicate the rights of the third parties in a summary proceeding of confirmation of an arbitral award, and in issuing a writ of execution and notice to vacate without a trial on the respective rights of the third parties,” the CA decision stated.
“Private respondent BCDA is ordered to respect and not disturb the various contracts of the third parties occupying the leased premises and to assist in the processing of the claim of CJHDevCo filed with the COA who must act within sixty days, pursuant to existing laws,”the appellate court stressed.
For his part, Robert John Sobrepeña, CJHDevCo chairman, cited the CA ruling was a victory for all those have stake within the 247-hectare John Hay Special Economic Zone (|JHSEZ), citing that the court already ruled on the controversial matter that was time and again contested by the BCDA.
“Since the start of the case, we have been very clear that this was a fight for and with you who in mid-May woke up one day and found your doors posted with notices to vacate issued by the RTC Branch 6,”he added.
According to him, the rule of law was already upheld with the decision of the CA and it found that the third parties are buyers in good faith which should not have been touched by the court in the implementation of the arbitral award.
The CJHDevCo official assured that the CA decision assured the third parties that they will be safe in their homes until 2046.
On the other hand, BCDA said it found the decision of the Court of Appeals’ (CA) Former Special Fifth Division highly irregular and in grave abuse of discretion, and vowed to contest the decision as part of its rights under the judicial process and its mandate to protect the interest of government and the public.
“We are studying our legal options on whether to file a Motion for Reconsideration or go straight to the Supreme Court. But if there is one thing we are sure of, we will contest the patently erroneous decision of the CA,” BCDA head for legal services lawyer Peter Paul Andrew T. Flores said.
According to Flores, it is highly irregular for a court to modify the Final Award of an Arbitral Tribunal.
He noted that the final award has already been confirmed by the Regional Trial Court (RTC) of Baguio based on BCDA’s and CJH Development Corporation’s (CJHDevCo) respective petitions to confirm the said award. “The Final Award became executory after all the parties accepted the judicial confirmation by the RTC,” he said.
Flores said the 67-page decision as ordered by Associate Justice Noel G. Tijam and concurred by Associate Justice Myra V. Garcia-Fernandez and Associate Justice Victoria Isabel A. Paredes led to a modified and different interpretation of the Final Award.
He said through its petition before the CA and the resulting decision, CJHDevCo has circumvented the law by doing what under the Special ADP Rules, it is proscribed or prohibited from doing.
“CJHDevCo, through its petition before the CA, in effect modified and amended the Final Award and Judicial Confirmation,” Flores said.
Flores said the suit filed by CJHDevCo before the CA, supposedly in behalf of its sublessees, was self-serving and made to perpetuate its operations despite the ruling evicting it from Camp John Hay as CJHDevCo, its affiliates and officials held interest in about 20 percent of all sublessees.
The intervenors are mostly affiliates such as the College Assurance Plan, subsidiaries such as the CJH Golf Club, and various associates. The CA is very much aware that the intervenors are the same parties related to CJHDevCo and were never innocent sublessees.
He also pointed out that CJHDevCo was a sublessor in bad faith. “Knowing that their (CJHDevCo) lease with BCDA was only for 25 years, subject to renewal for another 25 years and not an automatic 50 years. CJHDevCo nonetheless gave a 50-year straight lease to its sublessees,” Flores said.
He said the CA’s decision and interpretation of the Arbitral Award has also obstructed and delayed the implementation of the said award.