BAGUIO CITY – The Sobrepeña-owned Camp John Hay Development Corporation (CJHDevCO) assured its locators and sub-lessees that the company is doing its best to ensure that their rights and interests are being respected by the State-owned Bases Conversion and Development Authority (BCDA) over the impending turnover of the 247-hectare John Hay Special Economic Zone (JHSEZ) to the government pursuant to orders from the Makati-based Philippine Dispute Resolution Center, Inc..
Robert John Sobrepeña, CJHDevCo chairman, said BCA is bound both by legal and equitable considerations to honor and protect their leasehold rights over their rights and interests on the properties that they purchased prior to the rescission of the original lease agreements and succeeding revised agreements by the arbitration tribunal.
“We wish to clarify that contrary to BCDA’s assertions, the final award of the arbitral tribunal is not yet executor. Under the law, CJHDevCo is not required to turnover Camp John Hay until and unless the arbitration award is confirmed by the city’s Regional Trial Court (RTC). Until such confirmation, neither BCDA or CJHDevCo, much less sub-lessees, is legally obliged to comply with its terms,” Sobrepeña stressed.
He pointed out BCDA cannot repudiate the sub-lease contracts since it has expressly consented to the same, adding that such contracts are not affected by the rescission of the 1996 original lease agreement, most especially because both the BCDA and CJHDevCo have been found to have committed mutual breaches.
According to him, an examination of the original agreement and the 2008 revised agreement between BCDA and CJHDevCo will lead to no other conclusion that the BCDA expressly consented to the sub-letting of real estate developments found within the special economic zone and that the same is logical as the main obligation of the developer under the original agreement is precisely to develop the leased property and sub-let it to third persons.
“It will be difficult, not to mention inequitable, for the BCDA to deny its conformity to the sub-lease contracts. Many of the real estate projects within the leased property were issued building permits by John Hay Management Corporation (JHMC), a subsidiary of BCDA. It likewise issued permits to operate to business, even issued certificates of registration as a John Hay enterprise to certain businesses located within the leased property,” he said.
The CJHDevCo official underscored any contrary interpretation of BCDA’s conformity to the sub-lease contracts would mean that instead of being held accountable for its own breaches, the BCDA would in fact be rewarded by the return of the entire leased property, inclusive of over P5.4 billion worth of improvements, but without the concomitant duty to respect the vested rights of third parties acquired in good faith.
Sobrepeña argued BCDA was fully aware that the various properties inside the economic zone were sub-let to third persons in good faith, citing that from 2009 to 2011, the BCDA had four nominees in the developer’s Board of Directors, thus, the Limited Warranty Deeds (LWDs) issued by the company confirming the existence of sub-leases until October 2046 were approved with the participation of BCDA’s nominees.
Moreover, he revealed BCDA was granted full access to CJHDevCo’s registry of LWDs and because of this, BCDA was fully aware, or could have made itself fully aware, of the sub-leases, and had it minded to, could have objected to the same but it never did.
Under such circumstances, he emphasized BCDA cannot now disclaim knowledge of the sub-lease contracts, nor claim that it had never consented to sub-letting of properties, citing that it is now clear that if BCDA were allowed to repudiate the sub-leases, the BCDA would not only be rewarding itself for its glitches, but worst, enriching itself at the expense of the public who patronize the project.
Under the Civil Code of the Philippines, an order for “mutual restitution” cannot include properties currently in the possession of third persons who acted in good faith.
The CJHDevCO official cited the company cannot be ordered, as an incident of mutual restitution, to deliver to BCDA those areas inside the economic zone occupied by sub-lessees and that it can only deliver such areas which are physically in its possession, including its administrative offices.
He cited ‘this much was recognized by the arbitral tribunal, which ordered mutual restitution only as far as practicable under the circumstances.
Sobrepeña pointed out BCDA cannot claim that the sub-leases were automatically terminated with the rescission of the principal lease contract since the principle that the sub-lessee is bound by a judgement against his sub-lessor was applied by the Supreme Court (SC) in cases involving vastly different factual milieu than the existing case.
He accused BCDA that the arbitration tribunal has been guilty of breach, and it likewise had knowledge of and expressly consented to the sub-leases.
He reiterated that under the law, third persons are not bound by the decision of the arbitral tribunal and cannot be affected by the proceedings of the case since it is an elementary rule of fairness that no man shall be affected by a proceeding in which he is a stranger.
“BCDA cannot insist that the judgement of the arbitration tribunal is conclusive against the sub-lessees. No man shall be deprived of his private property without having his day in court,” he said.
As a token of the company’s sincere concern, Sobrepeña assured every homeowner and locator that in the event of litigation, the company shall make available legal counsels to assist them to defend their rights.
By Dexter A. See