Camp John Hay tenants told to talk to BCDA

February 16, 2015

by Catherine Pillas – February 13, 2015

BASES Conversion Development Authority (BCDA) executives are asking tenants and sublessees in Camp John Hay (CJH) to coordinate with the state-owned firm after the CJH Development Corp. (CJHDevco) was told to vacate the property.

“With the decision of the original lease agreement [with CJHDevco] rescinded and since all their contracts are subleases, then those [contracts] would be legally affected and therefore [tenants] should come to the BCDA, now the owner of the land,” BCDA President Arnel Paciano D. Casanova said in a news conference with reporters on Friday.

“The right of a sublessee emanates from the original lease. Since the original lease has been rescinded, the rights of the sublessees are put into question, so we’re encouraging them to coordinate with the BCDA so we can properly evaluate the situation,” Casanova added.

The arbitral committee of the Philippine Dispute Resolution Center recently ruled in favor of the BCDA in its bid to terminate the contract of CJHDevco and to collect its debt in lease payments.

In its unanimous decision, the said committee decided that the original lease agreement is terminated and ordered CJHDevco to vacate the leased premises and deliver the leased property, including new constructions and permanent improvements introduced during the period of the lease, to the BCDA.

According to the opinion of one of the arbitrators and lawyer Teodoro Kalaw IV, CJHDevco should pay rentals in arrears to the BCDA to the tune of P2.4 billion.

“All the previous buyers and locators should coordinate immediately with BCDA so we could assess the kind of relationships they have with CJHDevco,” Casanova said.

The BCDA estimates there are 118 business enterprises, including restaurants, retail and other services, including business-process outsourcing offices in the property with 384 hotel rooms in the Forest Lodge. There are also 85 residential structures in CJH area.

The tribunal, however, also stated in one section of its decision that the BCDA return the amount of P1.4 billion, representing the total amount of rentals initially paid by CJHDevco to the BCDA. On this point, the BCDA is seeking further clarification from the court and aired the possibility of contesting the provision.

The judgment of the tribunal directing the BCDA to return the P1.4 billion; the court was not unanimous on that point.

There is a strong, separate opinion and this gives the BCDA the opportunity to ask the court to look into this,” said Peter Paul Andrew Flores, officer in charge of the BCDA legal services department.

Flores, also a lawyer, said they will seek a judicial confirmation from the Regional Trial Court in Baguio City to uphold the first part of the decision, the part directing CJHDevco to vacate the property and turn over all improvements on the site promptly.


Big Buzz: To pay or not to pay

February 16, 2015

Philippine Daily Inquirer: 12:56 AM / Monday, February 16th, 2015

After getting a ruling from an arbitration tribunal to boot out CJH Development Corp. (CJHDevCo) of businessman Roberto “Bob” Sobrepeña from the former US military facility Camp John Hay, the next move for the Bases Conversion Development Authority (BCDA) is to question the second part of the ruling: The order for the state-owned corporation to pay P1.42 billion in back rentals to its long-time unwanted tenant.

Overall, the BCDA deemed it a victory to get a unanimous ruling from the tribunal ordering CJHDevCo to vacate the 625-hectare estate in Baguio City. After all, this is a case that BCDA president Arnel Casanova has been working on for decades, from the time he was a legal counsel for the institution.

However, the BCDA believed there was ground to question the ruling on rental payments. BCDA is seeking to have the chair of the arbitration panel inhibited from the case. Apparently, the chair had previously issued adverse rulings against the BCDA on this same case, which the BCDA thinks should be enough reason to inhibit. Whether or not one arbitrator is impartial or not is subject to another legal debate.

Since it’s unusual for arbitrators in the same panel to have differing opinions when it comes to monetary compensation (in this case one arbitrator opined that it’s CJHDevCo that should pay P2.4 billion to the BCDA), the state corporation now seeks to question the independence of some members of the arbitration panel. From the point of view of the BCDA, CJHDevCo was the one that made a lot of money from this property deal as it had been able to declare dividends while deferring payments due the government.

The next step before the execution of this Camp John Hay decision is the judicial confirmation of award, during which this P1.4-billion compensation is expected to be challenged by BCDA. The Sobrepeña group, for its part, has stated that it would like to collect the P1.42 billion in back rentals awarded by the tribunal before vacating the property. Doris C. Dumlao


BCDA to review Camp John Hay subleases

February 16, 2015

by Bernie Magkilat
February 15, 2015

Some 118 business enterprises, 85 owners of residential structures and owners of 384 hotel rooms in Camp John Hay must submit themselves with the Bases Conversion and Development Authority (BCA) for the reevaluation of their contracts after the tribunal arbitration committee rescinded the contract of operator CJH Development Corp (CJHDevCo).

Based on the arbitration committee’s decision on February 11, 2015, CJHDevCo should vacate Camp John Hay and return the property to BCDA immediately, including the old and new structures and improvements therein. The verdict was issued two years after both parties agreed to enter into an arbitration proceeding.

BCDA President and CEO Arnel Paciano Casanova said during a press conference that the decision effectively rescinded the original lease contract of CJHDevCo, the subleases entered into by the businesses and locators in Camp John Hay entered with CJHDevCo have been rescinded as well.

“Since the original lease has been rescinded, the subleases would then be legally affected by the decision. So, we are calling on investors in Camp John Hay to coordinate with us so we can work on an orderly transition. It is also in their interest to settle with us,” said Casanova said.

There are 118 business enterprises that have entered contracts with CJHDevCo including retail outlets, restaurants, BPOs firms. There are also 85 residential structures that were granted 50 year leases when the CJHDevCo is only good for 25 years. The Manor Hotel has 384 rooms already owned by individuals.

“Whatever agreement they entered into with CJH Development Corporation no longer applies because their subleases have been terminated with the principal lease,” he reiterated.

“CJHDevco has been ordered to vacate the property and they should do so immediately. We want to ensure the security in Camp John Hay and prevent sabotage, pilferage and the destruction of property,” Casanova said.

With the arbitral decision, the public is forewarned that CJHDevco no longer has the legal authority to do business within the zone.

BCDA said it does not have the complete documentation on the subleases approved by the Sobrepeña-led CHJDevCo because it has not been transparent in their transactions with them. Casanova said they will have to assess the contracts and the relationship of the documentations of the subleases.

“Some of them may not have contracts at all, they are not transparent at so they do with their thing with impunity and double sales,” he said.

Since the decision for CJHDevCo to vacate the property and return the property to BCDA was a unanimous among three-man arbitration committee, BCDA will just have to ask the Regional Trial Court of Baguio to issue a judicial confirmation of the decision, but said this is largely procedural.

On the decision of the tribunal for BCDA to return P1.4 billion to CHJDevCo, Casanova said they are still looking at their legal option because this particular decision was not unanimous. The return of the P1.4 billion to BCDA was only issued in a separate opinion by one of the arbitrators although CJHDevCo also admitted that it owed P2.4 billion in rental arrears to BCDA.

“We still have to consult for our legal option because the tribunal is divided on that issue,” he said.

“While we see this as a breakthrough, we are duty bound to pursue our monetary claims because 25 percent of our earnings from Camp John Hay is meant for its stakeholders,” Casanova said.

CJHDevco did not pay the BCDA its lease rentals and its arrears have ballooned to over P3.4 billion, P850 million of which should have gone to the local governments of Baguio, La Trinidad, Itogon, Sablan, Tuba and Tublay.

Co-arbitrator Teodoro Kalaw IV said CJHDevco should pay rentals in arrears amounting to P2.4 billion.

Kalaw said: “Claimant has expressly acknowledged to owe Respondent at the time of the execution of the 2008 RMOA on 1 July 2008, in the amount of Two Billion Four Hundred Six Million One Hundred Forty Thousand Five Hundred Twenty Five Pesos (P2,406,140,525.00).


Arbitration panel orders Sobrepena group to return Camp John Hay to government

February 16, 2015

By: InterAksyon.com
February 12, 2015 6:59 PM
InterAksyon.com means BUSINESS

MANILA – An arbitration panel looking to resolve a dispute over Camp John Hay as ordered the Sobrepena group to return the former U.S. military camp to the Philippine government.

In a statement, Bases Conversion and Development Authority (BCDA) said the arbitration panel in a decision dated February 11, 2015 ordered Sobrepena-owned Camp John Hay Development Corporation (CJHDevCo) to vacate the former military base turned economic zone.

“We see this as a victory for government. Finally it will be returned and it can now be developed for the benefit of the public,” BCDA president and chief executive officer Arnel Paciano D. Casanova said.

“However, we are studying the decision and weighing our legal options. While it is good that the property will be returned to government, it is not just that government will not be compensated for CJHDevCo’s use of the facility for over a decade and for which it has earned billions,” Casanova said.

CJHDevCo has failed to pay state-run BCDA lease rentals, with the arrears swelling to over P3.4 billion, 25 percent of which should have been for the local government of Baguio.

“Since it cannot be determined which of the parties first violated the 2008 RMOA, such is hereby deemed extinguished due to the mutual breach of the same by both parties,” lawyer Mario E. Valderrama, who chairs the arbitration panel, said.

“The termination by respondent of the original lease agreement is hereby confirmed in view of the breach of the same by claimant: the claimant is ordered to vacate the leased premises and promptly deliver the leased property, inclusive of all new constructions and permanent improvements introduced during the term of the lease as reckoned from the execution of the original lease agreement to respondent in good and tenantable condition in all respects, reasonable wear and tear excepted,” Valderrama said.

In a separate opinion, co-arbitrator Teodoro Kalaw IV said CJHDevCo should pay rentals in arrears amounting to P2.4 billion.

“Claimant has expressly acknowledged to owe respondent at the time of the execution of the 2008 RMOA on 1 July 2008, in the amount of P2,406,140,525,” Kalaw said.

In a decision dated September 30, 2014, the Court of Appeals had agreed with the BCDA’s position that “it is the public that suffers for the failure of CJH Devco to fulfill its obligations.”

To recall, BCDA terminated the lease of CJHDevCo over the 247 hectare Camp John Hay Economic Zone in May 2012 for its failure to perform its obligations and for defaulting in its lease payments even after three restructuring.

In July of the same year, the Baguio City Regional Trial Court ordered both parties to enter into arbitration through the Philippine Dispute Resolution Center.


Arbitration body to CJHDevco: Vacate Camp John Hay

February 16, 2015

By Louella Desiderio (The Philippine Star) | Updated February 14, 2015 – 12:00am

MANILA, Philippines – The Camp John Hay Development Corp. (CJHDevCo) has been ordered to vacate Camp John Hay and return the property to the Bases Conversion and Development Authority in a decision dated Feb. 11, 2015.

The arbitration tribunal under the Philippine Dispute Resolution Center Inc. (PDRCI) ordered CJHDevCo to vacate the property and return it to BCDA.

The arbitration tribunal was chaired by Mario Valderrama and composed of co-arbitrators Teodoro Kalaw IV and Rogelio Nicandro.

“We see this as a victory for government. Finally it will be returned and it can now be developed for the benefit of the public,” BCDA president and chief executive officer Arnel Paciano D. Casanova said.

“However, we are studying the decision and weighing our legal options. While it is good that the property will be returned to government, it is not just that – government will not be compensated for CJHDevCo’s use of the facility for over a decade and for which it has earned billions.”

CJHDevCo has not been paying the BCDA its lease rentals and its arrears have ballooned to over P3.4 billion, 25 percent of which should have been for the local government of Baguio.

The tribunal, chaired by lawyer Mario E. Valderrama, said “since it cannot be determined which of the parties first violated the 2008 RMOA, such is hereby deemed extinguished due to the mutual breach of the same by both parties… the termination by respondent of the original lease agreement is hereby confirmed in view of the breach of the same by claimant: the claimant is ordered to vacate the leased premises and promptly deliver the leased property, inclusive of all new constructions and permanent improvements introduced during the term of the lease as reckoned from the execution of the original lease agreement to respondent in good and tenantable condition in all respects, reasonable wear and tear excepted.”

In a separate opinion, co-arbitrator Teodoro Kalaw IV said CJHDevCo should pay rentals in arrears amounting to P2.4 billion.

Kalaw said: Claimant has expressly acknowledged to owe respondent at the time of the execution of the 2008 RMOA on July 1, 2008, in the amount of P2,406,140,525.
In a decision dated Sept. 30, 2014, the Court of Appeals agreed with the BCDA’s position that “it is the public that suffers for the failure of CJH Devco to fulfill its obligations…”

BCDA is calling on investors and locators in Camp John Hay in Baguio City to get in touch with the agency following an order issued to Camp John Hay Development Corp. (CJHDevCo) to vacate the property.

“We are calling on all locators (of Camp John Hay) to coordinate with BCDA so that we would be able to evaluate the arrangement they’ve entered into,” Casanova said in a press conference yesterday.

The call was made after the arbitration committee ordered CJHDevCo to vacate the property and return it to BCDA.

“With that order, CJHDevCo ceases to be owners of the economic development zone and have no authority anymore to do business or transact with locators in the area,” Casanova said.

The order also affects all sub-leases entered into by CJHDevCo.

“If the right of sub-lessee emanates from original lease and the original lease has been rescinded, then the right of sub-lessees is now put into question. That is why they need to coordinate with BCDA so we know how to properly evaluate their situation,” Casanova said.

John Hay Management Corp. president and chief executive officer Jamie Eloise Agbayani said that based on their records, there are 118 business enterprises inside the camp, with majority being sub-lessees of CJHDevCo.

Apart from the business enterprises, there are 384 hotel rooms in Forest Lodge as well as an estimated 85 residential structures in Camp John Hay owned by individuals who will also need to get in touch with BCDA.

The order was issued amid a dispute between BCDA and CJHDevCo over alleged unpaid rentals for Camp John Hay.

The BCDA entered into a lease agreement with CJHDevCo for a portion of the John Hay Special Economic Zone in 1996.

Under the agreement, CJHDevCo was authorized to lease, develop, operate and manage the leased property for 25 years or until October 2021.

Locators in the property covered by the lease agreement have to enter into sub-lease agreements with CJHDevCo, which in turn collects the payments for the use of the property.

In May 2012, the BCDA terminated its lease agreement with CJHDevCo as it claimed that the latter avoided payment of its obligations to the government.


Camp John Hay returns to BCDA

February 16, 2015

Rappler.com
Published 1:30 PM, Feb 13, 2015
Updated 5:03 PM, Feb 13, 2015

VICTORY.
The CJH Development Corporation is ordered to vacate Baguio’s Camp John Hay and return the property to the Bases Conversion and Development Authority.

File photo from the City of Pines website

MANILA, Philippines (UPDATED) – It was a victory for the government, as an arbitration committee ordered CJH Development Corporation (CJHDevco) to vacate Camp John Hay in Baguio City and return the property to the Bases Conversion and Development Authority (BCDA).

BCDA is the government agency mandated to develop Camp John Hay, a former US facility.

The 690-hectare property, originally developed for rest and recreation of employees of the US military and Department of Defense, was turned over to the Philippine government on July 1, 1991. It was initially administered by the Philippine Tourism Authority (PTA) and then turned over to BCDA.

“We see this as a victory for [the] government. Finally it will be returned and it can now be developed for the benefit of the public,” BCDA president and chief executive officer Arnel Paciano D. Casanova said Thursday, February 13, on the decision dated February 11, 2015.

But BCDA is tempering its celebratory mood on this legal victory as the body still has to study the decision and weigh their legal options.

CJHDevco has not been paying the BCDA its lease rentals and its arrears have ballooned to over P3.4 billion ($76.83 million), 25% of which should have been for the local government of Baguio.

The tribunal, chaired by Mario E. Valderrama, said since it cannot be determined which of the parties first violated the first 2008 restructuring memorandum of agreement (RMOA), it is then deemed extinguished due to the mutual breach of the same by both parties.

The decision added that the termination by respondent of the original lease agreement is a breach of the same by claimant CJHDevco.

“The claimant is ordered to vacate the leased premises and promptly deliver the leased property, inclusive of all new constructions and permanent improvements introduced during the term of the lease as reckoned from the execution of the original lease agreement to respondent in good and tenantable condition in all respects, reasonable wear and tear excepted,” the decision said.

CJHDevco is also ordered to pay its rentals in arrears amounting to P2.4 billion ($54.24 million), said in a separate opinion by co-arbitrator Teodoro Kalaw IV.

Orderly transition
BCDA is now calling on investors in Camp John Hay to work with the agency for the proper development of the property.
“Whatever agreement they entered into with CJHDevco no longer applies because their subleases have been terminated with the principal lease,” Casanova said in a statement released Friday, February 13.

CJHDevco has been ordered to vacate the property and they should do so immediately, Casanova stressed.

“We want to ensure the security in Camp John Hay and prevent sabotage, pilferage, and the destruction of property,” Casanova said.

The public is also forewarned that CJHDevco no longer has the legal authority to do business within the zone.

In May 2012, BCDA terminated the lease of CJH Development Corporation (CJHDevCo) over the 247-hectare Camp John Hay Economic Zone for its failure to perform its obligations and for defaulting in its lease payments despite 3 restructurings.

In August 2012, BCDA filed with the DOJ an estafa complaint against CJHDevCo board of directors and officials for misrepresenting the state of the company’s finances, misleading the government into believing that CJHDevCo was capable of paying its annual rent.

In a decision dated September 30, 2014, the Court of Appeals agreed with the BCDA’s position that “it is the public that suffers for the failure of CJHDevco to fulfill its obligations.”

BCDA appeals to investors
The BCDA is calling on investors in Camp John Hay to work with it for the proper development of the former US military facility.

“We are calling on investors in Camp John Hay to coordinate with us so we can work on an orderly transition.” BCDA president and chief executive officer Arnel Paciano Casanova said. “Whatever agreement they entered into with CJH Development Corporation (CJHDevco) no longer applies because their subleases have been terminated with the principal lease.”

The arbitration committee has ordered CJHDevco to vacate Camp John Hay and return the property to the BCDA in a decision dated February 11, 2015.

“CJHDevco has been ordered to vacate the property and they should do so immediately. We want to ensure the security in Camp John Hay and prevent sabotage, pilferage and the destruction of property,” Casanova said.

With the arbitral decision, the public is forewarned that CJHDevco no longer has the legal authority to do business within the zone. – Rappler.com


One Response to BCDA wins back Camp John Hay

February 16, 2015

February 14, 2015 at 8:49 am

I have been following this story because as an urban planner, it affects the development of a city; it defeats planning and development – because of mistaken greed and the supremacy of private capitalist entrepreneurship over that of public good. The defeated respondent also has business interests in MRT. I congratulate the Arbitration Committee with such a fair and just decision. Why it took over 10 years.is also a failure of our justice system. If daily hearings are held, this should not take more than a year. Justice delayed is justice denied.


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