BAGUIO CITY – The Supreme Court (SC) recently denied with finality all motions for reconsideration filed by the embattled Camp John Hay Development Corporation (CJHDevCO) and its third party respondents as it upheld its previous ruling allowing the State-owned Bases Conversion and Development Authority (BCDA) to recover the 247-hectare property within the John Hay Special Economic Zone (JHSEZ).
In a resolution dated October 22, 2024, the SC en banc ruled to deny with finality the said motions for reconsideration as no substantial arguments were presented by the CJH DevCO to warrant the reversal of the assailed decision and that no further pleadings or motions will be entertained by the high tribunal.
Subsequently, the SC Clerk of Court on the same day issued an entry of judgement certifying that the decision dated April 3, 2024 has been filed and recorded with the Judicial Records Office.
The said decision granted BCDA’s petition for review on certiorari and reversed and set aside the July 30, 2015 decision of the Court Appeals (CA) on the said controversial matter.
Further, the High Court ruled that the March 27, 2015 ruling of the Regional Trial Court (RTC) Branch 6 of Baguio City in Civil Case No. 7561-R confirming the final award dated February 11, 2015 in PDRCI Case No. 60-2012 is reinstated. The April 14, 2015 writ of execution and the ex-officio sheriff’s Notice to Vacate were likewise reinstated.
The SC’s unanimous decision affirmed the 2015 arbitral award as well as reinstated the writ of execution and notice ordering CJH DevCo and all persons claiming rights under them to vacate the said premises within the former American military base.
In a statement, BCDA lauded the latest SC ruling and assured the public that businesses will continue to operate within the economic zone.
Moreover, BCDA is now closely coordinating with all stakeholders to ensure a smooth transition between CJH DevCo and the State corporation.
Earlier, the High Court upheld an arbitral ruling ordering CJH Development Corporation (CJH DevCo) to vacate a portion of the John Hay Special Economic Zone (John Hay SEZ) it leased from the BCDA.
In a Decision penned by Associate Justice Japar B. Dimaampao, the Supreme Court En Banc granted the petition for review on certiorari filed by BCDA assailing the rulings of the Court of Appeals (CA) which had reversed the Regional Trial Court (RTC)’s confirmation of the arbitral ruling.
The Court also denied the petition for certiorari filed by CJH DevCo challenging the rulings of the Commission on Audit (COA) for dismissing CJH DevCo’s money claim arising from the arbitral ruling.
BCDA was created in 1992 to implement the government’s policy to accelerate the sound and balanced conversion of former United States (US) military bases into alternative productive uses and enhance derived benefits to promote economic and social development.
Among BCDA’s powers is to own, hold, and/or administer several former US military reservations, including Camp John Hay in Baguio City.
Following the transformation of Camp John Hay into the 625-hectare John Hay SEZ, the lease and development of a 247-hectare portion (Leased Property) was awarded to CJH DevCo.
BCDA, as lessor, then entered into a lease agreement with CJH DevCo, Fil-Estate Management, Inc., and Penta Capital Investment Corporation, as lessees, for the use, management, and operation of the Leased Property.
Under the lease agreement, BCDA shall remain the owner of the Leased Property, while CJH DevCo shall own improvements it will introduce. However, at the end of the lease agreement, CJH DevCo is obligated to transfer the ownership of the improvements to BCDA.
CJH DevCo was also authorized under the agreement to sublease the Leased Property to third persons.
Prompted by disputes as to the parties’ respective obligations under the lease agreement, CJH DevCo filed against BCDA a complaint in arbitration with the Philippine Dispute Resolution Center, Inc. (PDRCI).
The PDRCI arbitral tribunal found that both parties were guilty of breaches of their obligations under the agreement, thus its mutual rescission was warranted. The arbitral ruling (Final Award) thus ordered mutual restitution, with the parties reverted to their original position prior to the execution of the agreement as far as practicable.
CJH DevCo was specifically ordered to return to BCDA the Leased Property, together with all improvements. BCDA, in turn, must refund to CJH DevCo the rent the latter had already paid, amounting to P1,421,096,052.
In an Order, the RTC confirmed the Final Award. When the Order became final and executory, the RTC issued a Writ of Execution. A Notice to Vacate was thus served upon CJH DevCo and its sub-lessees occupying the Leased Property. BCDA, on the other hand, was served a demand to pay CJH DevCo the amount of P1,421,096,052 within 30 days.
BCDA opened an escrow account in the amount fixed in the Final Award. CJH DevCo, however, filed a Very Urgent Omnibus Motion praying that the Notice to Vacate be enforced only on CJH DevCo, and not its sub-lessees.
But before the RTC could rule on the Omnibus Motion, CJH DevCo filed a petition for certiorari and prohibition before the CA. The sub-lessees filed a separate petition-in-intervention, claiming that their inclusion in the RTC Order and Writ of Execution was unfounded and violative of due process.
The CA subsequently nullified the Notice to Vacate and Writ of Execution, finding grave abuse of discretion on the part of the RTC for enforcing the Final Award against the sub-lessees who were excluded from the arbitration.
The CA further enjoined the RTC from enforcing the Final Award, Writ of Execution, and Notice to Vacate against the sub-lessees, “until their respective rights and interests are determined upon compulsory arbitration or as may be adjudicated by the regular courts.”
BCDA was thus prompted to file its present petition before the Court. By Dexter A. See
